Arkansas has issued guidance for insurance companies and brokers on premium tax payments for nonadmitted, or excess and surplus, insurance.
In Bulletin No. 5-2011, the Arkansas Insurance Department outlined the state’s policies with regard to the implementation of the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), which was effective July 21, 2011. Under the NRRA, only an insured’s home state may assess premium tax payments on nonadmitted insurers.
Arkansas is considered an insured’s home state “if the insured maintains its principal place of business here or, in the case of an individual, the individual’s principal residence is here,” according to the insurance department’s bulletin.
If Arkansas is the home state of an insured, the state’s requirements will apply with regard to the collection of premium tax. If 100 percent of an insured’s operational risk is located in another state, then the insured’s home state is considered to be the one “to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.”
The bulletin also explained that “If more than one insured from an affiliate group are named insureds on a single nonadmitted insurance placement,” Arkansas will be considered the home state for that placement if it is the home state of the member of the affiliate group with the largest percentage of premium under that insurance contract.
Source: Arkansas Insurance Department
Topics Arkansas
Was this article valuable?
Here are more articles you may enjoy.
