Chapter 405-B: Nonadmitted Insurance, Multi-State Risks Premium Collection and Disbursement

The purpose of this chapter is to enable the collection and disbursement of premium taxes for nonadmitted insurance, including surplus lines insurance, necessitated by the passage of the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA), which was incorporated intact into the Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173.

In this chapter:

I. "Commissioner" means the insurance commissioner.

II. "Home state" means, except as provided in subparagraph (b), with respect to an insured:

(a) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or

(b) If 100 percent of the insured risk is located out of the state referred to in subparagraph (a), the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated.

III. "Multi-state risk" means a risk covered by a nonadmitted insurer with insured exposures in more than one state.

For the purposes of carrying out the provisions of the Nonadmitted and Reinsurance Reform Act of 2010, the commissioner is authorized to enter into a cooperative or reciprocal agreement, or compact with another state in order to facilitate the collection, allocation, and disbursement of premium taxes attributable to the placement of nonadmitted insurance, provide for uniform methods of allocation and reporting among nonadmitted insurance risk classifications, and share information among states relating to nonadmitted insurance premium taxes.

I. Every person who procures or causes to be procured or continues or renews insurance with a surplus lines company shall collect and pay to the commissioner a sum based on the total gross premiums charged, less any return premiums, for surplus insurance provided by the licensee pursuant to the license.

II. Where the insurance covers properties, risks, or exposures located or to be performed both in and out of this state, the sum payable shall be computed based on:

(a) An amount equal to 3 percent on that portion of the gross premiums allocated to this state, plus

(b) An amount equal to 3 percent on the portion of the premiums allocated to other states or territories, less

(c) The amount of gross premiums allocated to this state and returned to the insured.

I. Every insured who procures or causes to be procured or continues or renews insurance with any unlicensed insurer pursuant to RSA 406-B:16 shall collect and pay to the commissioner a sum based on the total gross premiums charged, less any return premiums, for independently procured insurance.

II. Where the insurance covers properties, risks, or exposures located or to be performed both in and out of this state, the sum payable shall be computed based on:

(a) An amount equal to 3 percent on the portion of the gross premiums allocated to this state, plus

(b) An amount equal to 3 percent on the portion of the premiums allocated to other states or territories, less

(c) The amount of gross premiums allocated to this state and returned to the insured.

I. Every insured who procures or causes to be procured or continues or renews insurance with any unlicensed insurer pursuant to RSA 406-B:17 shall collect and pay to the commissioner a sum based on the total gross premiums charged, less any return premiums, for independently procured insurance.

II. Where the insurance covers properties, risks, or exposures located or to be performed both in and out of this state, the sum payable shall be computed based on:

(a) An amount equal to 4 percent on such insurance other than marine insurance and a premium tax of 2 percent of gross premium charged for such marine insurance, the portion of the gross premiums allocated to this state, plus

(b) An amount equal to 4 percent on the portion of the premiums allocated to other states or territories, less

(c) The amount of gross premiums allocated to this state and returned to the insured.

The commissioner is authorized to participate in the clearinghouse established through the agreement or compact for the purpose of collecting and disbursing to reciprocal states any funds collected pursuant to RSA 405-B:4, RSA 405-B:5, and RSA 405-B:6 on properties, risks or exposures located or to be performed outside of this state. To the extent that other states where portions of the properties, risks or exposures reside have failed to enter into an agreement, compact or reciprocal allocation procedure with this state, the net premium tax collected shall be retained by this state.

The commissioner is authorized to utilize or adopt the allocation schedule included in the agreement or compact for the purpose of allocating risk and computing the tax due on the portion of premium attributable to each risk classification and to each state where properties, risks or exposures are located.