2004 Legislation
Print Friendly

HOUSE BILL NO. 828 – Insurance, surplus lines, tax


View Bill Status

View Bill Text

View Statement of Purpose / Fiscal Impact

Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.

This sentence is marked with bold and underline to show added text.

This sentence is marked with strikethrough and italic, indicating
text to be removed.

Bill Status

H0828...............................................by REVENUE AND TAXATION
INSURANCE - SURPLUS LINES - Amends existing law to revise the rate of tax
on surplus lines; and to provide a correct code reference.
03/09    House intro - 1st rdg - to printing
03/10    Rpt prt - to 2nd rdg
03/11    2nd rdg - to 3rd rdg
03/12    3rd rdg - PASSED - 64-0-6
      AYES -- Andersen, Barrett, Bauer, Bayer, Bell, Black, Block, Boe,
      Bolz, Bradford, Campbell, Cannon, Collins, Crow, Deal, Denney,
      Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18), Field(23),
      Gagner, Garrett, Harwood, Jaquet, Jones, Kellogg, Kulczyk, Lake,
      Langford, Langhorst, Martinez, McGeachin, McKague, Meyer, Miller,
      Mitchell, Naccarato, Nielsen, Pasley-Stuart, Raybould, Ridinger,
      Ring, Ringo, Roberts, Robison, Rydalch, Sali, Sayler, Schaefer,
      Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass,
      Stevenson, Trail, Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Barraclough, Bedke, Clark, Cuddy, Henbest,
    Floor Sponsor - Collins
    Title apvd - to Senate
03/15    Senate intro - 1st rdg - to Loc Gov
03/18    Rpt out - rec d/p - to 2nd rdg
03/19    2nd rdg - to 3rd rdg
    Rls susp - PASSED - 35-0-0
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett(Maxand),
      Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon,
      Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge,
      Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
      Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk,
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Compton
    Title apvd - to House
03/20    To enrol - Rpt enrol - Sp signed - Pres signed
03/22    To Governor
04/02    Governor signed
         Session Law Chapter 387
         Effective: 07/01/04

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 828
                             BY REVENUE AND TAXATION COMMITTEE
  1                                        AN ACT
  5    Be It Enacted by the Legislature of the State of Idaho:
  6        SECTION  1.  That  Section 41-1229, Idaho Code, be, and the same is hereby
  7    amended to read as follows:
  8        41-1229.  TAX ON SURPLUS LINES. (1) On or before the first day of March of
  9    each year each broker shall remit to the  director  a  tax  on  the  premiums,
 10    exclusive  of  sums collected to cover federal and state taxes and examination
 11    fees, on surplus line insurance subject to tax transacted by him with unautho-
 12    rized insurers during the preceding calendar  year  as  shown  by  his  annual
 13    statement filed with the director, and at the following rates:
 14                BEGINNING EFFECTIVE DATE OF POLICY                RATE
 15             January 1, 1987 through July 31, 1987               3%
 16             August 1, 1987 through July 31, 1988                3.663%
 17             August 1, 1988 through December 31, 1994            3%
 18             January 1, 1995, and thereafter                     2.75%
 19        (a)  For  calendar years 2004, 2005 and 2006, beginning with the effective
 20        date of the policy, two and seventy-five hundredths percent (2.75%); and
 21        (b)  For calendar year 2007 and thereafter, beginning with  the  effective
 22        date of the policy, one and five-tenths percent (1.5%).
 23    Such  tax  shall be in lieu of all other taxes upon such insurers with respect
 24    to the business so reported.
 25        (2)  If a surplus line policy covers risks or exposures only partially  in
 26    this  state,  the  tax so payable shall be computed upon the proportion of the
 27    premium which is properly allocable to the risks or exposures located in  this
 28    state.
 29        SECTION  2.  That  Section 41-1233, Idaho Code, be, and the same is hereby
 30    amended to read as follows:
 32    insured  who  in  this state procures or causes to be procured or continues or
 33    renews insurance in an unauthorized foreign insurer, or any  self-insurer  who
 34    in  this  state  so  procures  or  continues excess loss, catastrophe or other
 35    insurance, upon a subject of insurance resident, located or  to  be  performed
 36    within this state, other than insurance procured through a surplus line broker
 37    pursuant  to  the surplus line law of this state or exempted from tax pursuant
 38    to section 41-1212,  Idaho Code, shall within thirty (30) days after the  date
  1    such  insurance  policy  was  so received by the insured, continued or renewed
  2    file a written report of the same with the surplus line association  on  forms
  3    designated  by  the  director  and  furnished to the insured upon request. The
  4    report shall show the name and address of the insured or  insureds,  name  and
  5    address of the insurer, the subject of the insurance, a general description of
  6    the coverage, the amount of premium currently charged therefor, and such addi-
  7    tional  pertinent  information  as  the  director  reasonably requests. If the
  8    insurance covers also a subject of insurance resident, located or to  be  per-
  9    formed outside this state a proper pro rata portion of the entire premium pay-
 10    able  for all such insurance shall be allocated to this state for the purposes
 11    of this section.
 12        (2)  Any insurance in an unauthorized insurer  procured  through  negotia-
 13    tions  or  an application in whole or in part occurring or made within or from
 14    within this state, or for which premiums in whole  or  in  part  are  remitted
 15    directly or indirectly from within this state, shall be deemed to be insurance
 16    procured or continued or renewed in this state within the intent of subsection
 17    (1) of this section.
 18        (3)  The insured with respect to the obligation, chose in action, or right
 19    represented  by such insurance shall be subject to chapter 4, title 41 section
 20    41-1229, Idaho Code, as it pertains to premium tax. Within  thirty  (30)  days
 21    after  the  insurance  policy  was  so  received  by the insured, continued or
 22    renewed, and coincidentally with the filing with the surplus line  association
 23    of  the  report  provided  for  in subsection (1) of this section, the insured
 24    shall pay the amount of the tax to the director and a stamping fee to the sur-
 25    plus line association.
 26        (4)  The tax imposed hereunder if delinquent shall bear  interest  at  the
 27    rate of six percent (6%) per annum, compounded annually.
 28        (5)  The tax shall be collectible from the insured by civil action brought
 29    by the director, or by distraint.
 30        (6)  This  section  does  not abrogate or modify any provision of sections
 31    41-1201 (representing or  aiding  unauthorized  insurer  prohibited),  41-1202
 32    (representing  or  aiding  unauthorized  insurer  prohibited  --  penalty), or
 33    41-1203 (suits by unauthorized insurer prohibited), Idaho Code.
 34        (7)  This section does not apply as to life or disability insurances.

Statement of Purpose / Fiscal Impact

                      STATEMENT OF PURPOSE
                            RS 14253
     This legislation is a trailer bill for House Bill 724.  House
Bill 724 failed to uniformly change the rate for surplus line
insurance premium taxes which is addressed in both Idaho Code
Sections 41-1229 and 41-1233.  The premium tax change for surplus
lines is being done in one step to avoid confusion for premium tax
payers and to save reprogramming costs each year.

                         FISCAL IMPACT

The Fiscal Impact statement for House Bill 724 said:
The projections by the Idaho Department of Insurance assume an
estimated growth rate of 5.0 percent and the graduated adjustment
of all premium tax rates to 1.50 percent over six years.  The
fiscal impact to the state general fund is estimated to be
positive over the six-year implementation period.
The projected net difference to the General Fund revenue:

FY 2005     FY 2006    FY 2007   FY 2008   FY 2009   FY 2010
$1,008,190  $868,556   $729,204  $725,254  $969,273  $1,659,210

Name:     Woody Richards
          Surplus Lines Association
Phone:    (208) 385-5451