Tuesday, December 11, 2012

Single-State filers in South Dakota Must Use Clearinghouse as of January 1

The South Dakota Division of Insurance recently released Bulletin 12-06 noting that beginning January 1, 2013 single-state filers must report surplus lines tax information and remit premium tax online via the Surplus Lines Clearinghouse’s website.

Single-state policies with an effective date before January 1, 2013, or endorsements on those policies, will continue to be filed with South Dakota until renewal. Single-state policies issued or renewed on or after January 1, 2013, including policy endorsements, must be filed with the Clearinghouse. Surplus lines filers may begin filing with the Clearinghouse on January 1, 2013.

The Clearinghouse is operated by the Florida Surplus Lines Service Office and South Dakota is one of five states, plus Puerto Rico, using the Clearinghouse as a member of Nonadmitted Insurance Multi-State Agreement (NIMA).

The bulletin noted that surplus lines filers should be aware of the policy data elements required to make the filings with the Clearinghouse as they may differ from the information currently required by the state to be collected for each policy. The data elements, additional information, and an online tax calculator can be found at the Clearinghouse website: www.slclearinghouse.com.

Bulletins 12-06, and an earlier bulletin, 12-03, require all surplus lines filers in South Dakota report information and remit surplus lines premium tax through the Clearinghouse website after January 1, 2013. Because South Dakota regulates surplus lines brokers, rather than agencies, all surplus lines filers must file surplus lines tax information and remit premium tax under the name of the surplus lines broker or individual independently procuring insurance.

Bulletin 12-03 provided guidance to surplus lines brokers and those who independently procure surplus lines insurance (“surplus lines filers”) on multi-state policies where South Dakota is considered the “Home State” under the Nonadmitted and Reinsurance Reform Act (NRRA). Bulletin 12-06 provides guidance to all surplus lines filers, including those who file single-state surplus lines policies where South Dakota is the “Home State” under the NRRA (“single-state filers”).

Additional information is available at the Division’s website: http://dlr.sd.gov/insurance.

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