OGC Op. No. 06-11-10
The Office of General Counsel issued the following opinion on November 14, 2006, representing the position of the New York State Insurance Department.
Re: Fire Insurance Fee and Excess Line Insurance Companies
Does the fire insurance fee apply to excess line insurance companies in New York State?
No, under New York Insurance Law Section 9108, the fire insurance fee does not apply to excess line insurance companies in New York State. However, the excess line premium tax paid by the broker does include a component representing fire premium tax.
No specific fact pattern was presented.
N.Y. Ins. Law § 9108 (McKinney 2000) states in relevant part:
a) Every insurance company authorized to do business in this state shall collect, in addition to the applicable premium charge, a fire insurance fee .
Since an excess line insurance company is not authorized to do business in New York State, § 9108 does not apply to those companies. No fire insurance fee is imposed on an excess line insurance company pursuant to Article 91 of the Insurance Law.
However, under N.Y. Ins. Law § 2118(d)(1) (McKinney 2006), an excess line broker is obligated to pay to the Superintendent an excess line premium tax of a sum equal to three and six-tenths percent (3.6%) of the gross premiums, less return premiums, charged the insured by the insurer for insurance procured by using the licensees New York excess line license. This tax is imposed directly on excess line brokers, not insureds.
The relevant tax forms and allocation schedules are provided under Regulation 41 and may be obtained on the Departments website, www.ins.state.ny.us/abindx.htm. The Premium Tax Statement form is used to calculate the total premium tax. This form also provides a line item calculation ("Report 2") for a three percent (3%) fire premium tax. The fire premium tax is an itemized component of the total premium tax and an excess line broker is required to submit the fire premium tax as a separate check to the Department.
For further information you may contact Senior Attorney Elizabeth Barrett at the New York City Office.