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Q:
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If I have a multi-state risk with property in Montana. Do I have to pay taxes to Montana when the taxes for 100% of the premium are included
on the master policy for the state of domicile which happens to not be Montana?
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A:
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Yes, you only have to pay tax on the portion of the
premium associated with the Montana
risk per 33-2-311.
33-2-311 - Tax on surplus lines. There is imposed upon premiums
collected for surplus lines insurance transacted in this state a tax at the
same rate and computed in the same manner as provided in 33-2-705
as to premiums of authorized insurers, except that amounts collected from
the insured specifically for applicable state and federal taxes, and in
excess of the premium otherwise required, are not considered to be part of
the premium for the purposes of such computation. Upon filing of the annual
statement referred to in 33-2-310(2),
the surplus lines insurance producer shall pay to the commissioner the
amount of tax owing as to surplus lines insurance business transacted by
him during the preceding calendar year. If a surplus lines insurance policy
covers risks or exposures only partially in this state, the tax payable
must be computed upon the proportion of the premium which is properly
allocable to the risks or exposures located in this state.
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Q:
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Is Inland Marine subject to Fire Tax?
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A:
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Yes, Effective January 1, 2004 all submissions
received by the Montana Surplus Lines Stamping Office will be subject to
the 2.5% Fire Premium Tax on Inland Marine premiums. Tax is calculated
using 60% of the base Inland Marine premium multiplied by 2.5% Fire
tax. See 33-2-317.
Exemptions and http://www.mslaa.org/news.html
for further detail.
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Q:
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Am I allowed to charge a Filing Fee or Broker Fee on a Surplus Lines
policy in the state of Montana?
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A:
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No, per the Montana Department of Insurance
interpretation of (MCA 33-15-102) you are not allowed to charge any fees other than
the inspection fee for the exact amount of the inspection. If it is determined that broker fees,
filing fees or policy fees have been charged it can result in loss of
licensure. If you have any questions
please call the Department of Insurance at 406-444-2040.
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Q:
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Are Reservations in Montana
exempt to Premium Taxes and Fire Taxes?
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A:
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Yes, but they are not exempt to the Stamping Fee
which is an administrative cost for processing the filing. If you have any questions please call
Barb Vander Mars at the Department of Insurance for more detail
406-444-2040.
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Q:
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What is the ARL List and how does it apply to me as a Producer or
Customer Service Representative?
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A:
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The Approved Risk List is a list of risks that
are very hard or impossible to place in the Authorized Market. The Montana Department of Insurance (DOI)
reviews the list with a committee and approves this list every 6
months. The DOI can amend the list
at anytime.
If you are writing a risk
that falls under one of the categories listed then it is automatically can
be placed in the Surplus Lines market unless you are aware of an admitted
market that is willing to write and/or renew. This allows you to skip questions #1
through #4 on the submission form.
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Q:
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Can I attach a notarized statement to a submission form to replace the
notary stamp on Part 1 or Part 2?
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A:
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The answer is “No”. Per the MT Dept. of Insurance, the notary
stamp must be located on the submission form and not on any accompanying
documentation. All submissions not meeting these criteria will be returned
the surplus lines producer for correction.
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Q:
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What are the requirements for using the “10% AND $1500 exception” that
was passed in the 2005 legislative session (HB-631)?
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A:
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1. The unauthorized market quote was placed with
a surplus lines company that is “A” rated or better.
2. The authorized market quote that was used was
the lowest premium from the diligent search.
3. The difference between the authorized market
quote and the unauthorized market quote meet both the 10% AND the $1500
requirements.
For more information see MCA 33-2-302 or call
406-443-7324.
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Q:
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Is the diligent search still required if you want to use the “10% AND
$1500 exception” ?
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A:
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The answer is “YES”.
Nothing has changed regarding the diligent search. It still has to be completed and
documented before you can write business in the surplus lines market even
if there is a company in the authorized market that will write the
risk. Once you finish the diligent
search you can take the lowest authorized market quote and compare it to
the surplus lines quote to see if it is eligible for this exception.
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Q:
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How much time do I have to get my completed submission form to the
Surplus Lines Stamping Office?
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A:
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You have 30 days from the
effective date of the policy. You may
file on a binder if the policy ha not yet been received.
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Q:
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How do I get a resident/non-resident Montana Surplus Lines license?
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A:
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Get the application here or you can go to the Department of Insurance
website http://sao.mt.gov/forms/index.asp and look under licensing.
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Q:
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Where do I send Surplus Lines submission form, Endorsements and
Cancellations?
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A:
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As of May 21, 2008 our
new address is:
3131 Dredge Drive
Helena ,MT 59601
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We have phased out our old P.O Box and moved all mail
to our physical address.
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Q:
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When I write the policy through Underwriters at Lloyd’s, do I have to
list the syndicate number on the submission form?
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A:
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Yes, since only certain syndicates are allowed to write
business in Montana
the stamping office must know what syndicate you are using. To see a list of eligible syndicates
please go to “Forms and Materials to download the surplus lines eligible
company list.
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Q:
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How do I calculate the Surplus Lines stamping fees and taxes?
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A:
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We have taken all of the math out
of the equation for our members by creating a free stamping fee calculator
in Microsoft Excel available here or at http://www.mslaa.org/howtocalculatetax.html
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Q:
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If I have completed a diligent search and prior to writing the policy
come to find out that an insurance carrier in the admitted market will
write the risk, can I still file with Surplus Lines?
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A:
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No, if the risk will be accepted by any insurance
carrier in the admitted market it cannot be filed through surplus
lines. (MCA
33-2-302)
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Q:
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Where do I get extra Surplus Lines submission forms?
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A:
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On our website or download the free interactive
Microsoft Word document here
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Q:
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How do I know if there any changes in Surplus Lines Insurance Law?
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A:
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We will post all changes and
updates on this website on a monthly basis.
Changes are happening all the time so checking the White List /
Approved Risk List is suggested at least once a month to make sure that you
are still in compliance with the State Auditors Office.
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Q:
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What is an Endorsement / Cancellation coversheet for?
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A:
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That form has to be attached to all audit
endorsement, general change endorsements and cancellations that are submitted to the Stamping Office. Almost all endorsements are completely
different. This makes our job here
more efficient so that we are not searching the document for the required
information. This allows us to get
the copy back to you in a timely manner and prevents errors created by
interpretation of the endorsement.
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Q:
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Are Courtesy Filings allowed in Montana?
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A:
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No - Montana does not
allow Courtesy Filings
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Q:
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How do I find out what laws relate to Surplus Lines?
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A:
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We have done all of the leg work for you in our Surplus
Lines Manual. All information relating to the filing of
Surplus Lines is laid out in detail.
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Q:
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How do I get a Surplus Lines license (resident and non-resident)?
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A:
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You have to be a licensed P&C producer for at
least 5 consecutive years to be accepted.
You have to call the State Auditors Office (Aka: The Dept Of
Insurance) at 1-800-332-6148 to request a license.
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Q:
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On Part 1, Question 1
on the submission form it says “Give
a detailed description why insurance for this risk is unavailable from an
authorized insurer” what answers are acceptable for this field?
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A:
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Your
answer has to be detailed enough to explain why it was not
written. 1 word answers are not
acceptable and the submission will be mailed back to the SL Producer to be
corrected. If you are the SL
Producer and do not see the completed form before it is sent to the
stamping office, please make sure that you tell the Producing Producer to
be detailed with their answers or it will cost the SL Producer unwanted
work to fix the problem. Examples of
some answers that are not acceptable to the stamping office are now
available on the website at http://www.mslaa.org/rntu.htm
. The list on the website is not
every incorrect answer but just a few common ones that we see.
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