Surplus Lines Bill Passes Florida House, Goes to Governor For Action

CS/CS/CS/SB 1816 relating to Surplus Lines Insurance was taken up by the Florida House this morning.  The bill was rolled over to Third Reading, read a third time, and passed by a vote of 116 to 0. 

CS/CS/CS/SB 1816, which will now be sent to Florida Governor Rick Scott for action, includes the following provisions:

• Provides for tax and service fees to be based upon gross premium on multistate surplus lines policies and independently procured coverage (“IPC”) when Florida is home state;
• Requires that the surplus lines and IPC tax imposed by Florida as home state must not exceed the tax rate where the risk or exposure is located;
• Changes timeframe of submission of agent affidavit and payment of surplus lines service fee from monthly to quarterly;
• Requires payment of IPC tax and service fee on a quarterly basis;
• Authorizes the Department of Financial Services (“Department”) and the Office of Insurance Regulation (“Office”) to enter into a cooperative reciprocal agreement with other states pursuant to the federal Nonadmitted and Reinsurance Reform Act of 2010 (“NRRA”) and lists general terms that may be included;
• Requires the Florida Surplus Lines Service Office (“FSLSO”) to implement such cooperative reciprocal agreement and authorizes the FSLSO to collect the total tax imposed on multistate nonadmitted insurance premium;
• Permits the Department and the Office to adopt rules related to agreement;
• Provides that the Legislature has discretion to review the agreement to determine if it’s in the best interest of the state;
• Requires the Legislature to direct the Chief Financial Officer and the Office to withdraw from the agreement pursuant to its required notice provisions, if the Legislature determines the agreement is not in the best interest of the state;
• Requires the Department to submit a report by January 1, 2012 to the Senate President and Speaker of House, describing the terms of agreement entered and addressing collection and allocation of taxes and other listed details.

Should you have any questions or comments, please contact Colodny Fass.

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