FAQ - Broker/Other Fees

Should the premium taxes apply to fees, such as broker fees, inspection fees and policy fees?
How should tax calculation of the gross premium and fees be shown on the actual document in the filing?
If the state taxes and stamping fees are based on the gross premium plus fees, how should it be shown on the adding machine tape or cover note?

Q. Should the premium taxes apply to fees, such as broker fees, inspection fees and policy fees?

A. The DOI has directed that all charges imposed or required by the nonadmitted insurer, whether labeled as premium, inspection fees, policy fees or any other name constitute taxable premium. For additional information on fees, refer to SLA Bulletin #806.

Q. How should tax calculation of the gross premium and fees be shown on the actual document in the filing?

A. If the state taxes and stamping fees are calculated on the pure premium plus policy/inspection and/or other fees, the taxable premium would be the total of the gross premium and the fees.

Q. If the state taxes and stamping fees are based on the gross premium plus fees, how should it be shown on the adding machine tape or cover note?

A. If state taxes and stamping fees are based on premium plus fees, the broker should list the total of both as one amount on the adding machine tape or the cover note. The broker should not list the gross premium as one amount and the fees as a separate amount.