Current through Register Vol. 46, No. 39, September 25, 2024
(a) For
insurance contracts that have an effective date prior to July 21, 2011, an
excess line broker shall determine the taxable portion of the premium by using
the method of allocation, prescribed in the allocation schedule contained in
Appendix 4 of this Part, pertaining to the appropriate classification for the
property or risk.
(b) If the
allocation schedule does not identify a classification appropriate to the
property or risk being insured, the excess line broker shall use an alternative
equitable method of allocation for the property or risk.
(c) For insurance contracts that have an
effective date on or after July 21, 2011, where the property or risk is located
in both the United States and outside the United States, an excess line broker
shall determine the taxable portion of the premium by using the method of
allocation, prescribed in the allocation schedule contained in Appendix 5 of
this Title, pertaining to the appropriate classification for the property or
risk.
(d) If a policy covers more
than one classification:
(1) for any portion
of the coverage identified by a classification on the allocation schedule, the
premium tax shall be computed by using the allocation schedule for the
corresponding portion of the premium;
(2) for any portion of the coverage not
identified by a classification on the allocation schedule, the premium tax
shall be computed in accordance with subdivision (b) of this section;
and
(3) for any portion of the
coverage where the premium is indivisible, the tax shall be computed by using
the method of allocation pertaining to the classification describing the
predominant coverage.
(e) If the information provided by the excess
line broker is insufficient to substantiate the excess line broker's method of
allocation, or in the event that the superintendent determines the broker's
method is incorrect or inequitable, the superintendent shall determine the
equitable and appropriate amount of premium tax due to this State, as follows:
(1) where the allocation schedule identifies
a classification appropriate to the coverage, the superintendent shall use the
method prescribed in subdivision (a) of this section; and
(2) where the allocation schedule does not
identify a classification appropriate to the coverage, the superintendent, in
determining the equitable and appropriate amount of tax due to this State,
shall give significant weight to documented evidence of the underwriting bases
and other criteria used by the insurer and shall also consider other available
information, to the extent sufficient and relevant, including:
(i) for insurance contracts that have an
effective date prior to July 21, 2011, the percentage of the insured's physical
assets in this State, percentage of the insured's employee payroll in this
State, percentage of the insured's sales in this State, and the amount of
premium tax paid to another jurisdiction for the policy; and
(ii) for insurance contracts that have an
effective date on or after July 21, 2011, where the property or risk is located
in both the United States and outside the United States, the percentage of the
insured's physical assets in the United States, percentage of the insured's
employee payroll in the United States, percentage of the insured's sales in the
United States, and the amount of premium tax paid to another jurisdiction for
the policy.
