Bill Text For SB0066 - House Floor Version

 1|              HOUSE OF REPRESENTATIVES - FLOOR VERSION                 |
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 2|                          STATE OF OKLAHOMA                            |
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 3|             1st Session of the 58th Legislature (2021)                |
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 4|ENGROSSED SENATE                                                       |
  |BILL NO. 66                          By: Haste of the Senate           |
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  |                                         Sims of the House             |
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10|       An Act relating to insurance premium taxes; amending            |
  |       36 O.S. 2011, Section 1115, as last amended by                  |
11|       Section 1, Chapter 271, O.S.L. 2017 (36 O.S. Supp.              |
  |       2020, Section 1115), which relates to surplus lines             |
12|       coverage; creating exemption for certain policies;              |
  |       and providing an effective date                                 |
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15|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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16|    SECTION 1.     AMENDATORY     36 O.S. 2011, Section 1115, as       |
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17|last amended by Section 1, Chapter 271, O.S.L. 2017 (36 O.S. Supp.     |
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18|2020, Section 1115), is amended to read as follows:                    |
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19|    Section 1115.  A.  Where Oklahoma is the home state of the         |
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20|insured, every person licensed pursuant to Section 1106 of this        |
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21|title shall collect and pay as provided in this section a sum for      |
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22|premium tax based on the total gross premiums charged in connection    |
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23|with any broker-procured surplus lines insurance, less any return      |
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arsid3637075 SB66 HFLR                                             Page 1
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 1|premiums, for surplus lines insurance sold to the Oklahoma             |
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 2|home-state insureds by the surplus lines broker or licensee.           |
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 3|    B.  Where Oklahoma is the home state of the insured and the        |
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 4|insurance covers properties, risks or exposures located or to be       |
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 5|performed both in and out of Oklahoma, the sum payable to the          |
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 6|Oklahoma Insurance Commissioner shall be computed based on an amount   |
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 7|equal to six percent (6%) of the total gross premiums whether the      |
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 8|properties, risks or exposures are located or to be performed inside   |
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 9|or outside Oklahoma.  Any such unearned gross premium credited by      |
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10|the state to the surplus lines broker or licensee shall be returned    |
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11|to the policyholder by the broker or licensee.  The surplus lines      |
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12|licensee or broker is prohibited from rebating, for any reason, any    |
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13|part of the tax.                                                       |
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14|    C.  Where Oklahoma is the home state of the insured, gross         |
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15|premiums charged for independently procured insurance, less any        |
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16|return premiums, are subject to a premium tax at the rate of six       |
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17|percent (6%) payable to the Oklahoma Insurance Commissioner, whether   |
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18|the properties, risks or exposures are located or to be performed      |
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19|inside or outside Oklahoma.                                            |
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20|    D.  The Insurance Commissioner is authorized, in the exercise of   |
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21|his or her sole discretion and judgment, to participate in the         |
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22|Nonadmitted Insurance Multi-State Agreement or any other multistate    |
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23|agreement or compact with the same function and purpose for the        |
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24|function of collecting and disbursing to reciprocal states any funds   |
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arsid3637075 SB66 HFLR                                             Page 2
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 1|collected pursuant to the Unauthorized Insurers and Surplus Lines      |
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 2|Insurance Act applicable to other properties, risks or exposures       |
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 3|located or to be performed outside of Oklahoma.  Until such time as    |
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 4|the Insurance Commissioner may, while not being required to, join      |
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 5|such multistate agreement or compact, premium taxes relating to        |
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 6|Oklahoma home-state insureds shall continue to be paid and accounted   |
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 7|for by nonadmitted insurers through their surplus lines licensees      |
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 8|and brokers as provided in subsections A through C of this section.    |
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 9|    E.  When the surplus lines coverage of an Oklahoma home-state      |
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10|insured covers properties, risks or exposures located only in          |
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11|Oklahoma, the surplus lines licensee or broker or self-procuring       |
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12|insured shall pay the surplus lines premium tax payable on such        |
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13|Oklahoma-only risks solely to the Oklahoma Insurance Commissioner.     |
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14|    F.  Should the Insurance Commissioner exercise his or her sole     |
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15|discretion and judgment and decide to join the Nonadmitted Insurance   |
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16|Multi-State Agreement or any other multistate agreement or compact     |
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17|with the same function and purpose, the Insurance Commissioner is      |
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18|authorized in such event to establish a uniform, statewide rate of     |
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19|taxation applicable to lines of nonadmitted insurance.  This rate      |
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20|shall encompass all existing rates of taxation, fees and assessments   |
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21|imposed by this state, pursuant to subsections A through C of this     |
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22|section and the Insurance Commissioner shall document the method by    |
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23|which the statewide rate is calculated.  The Insurance Commissioner    |
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24|is authorized to receive any monies obtained as premium tax received   |
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arsid3637075 SB66 HFLR                                             Page 3
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 1|through any multistate agreement he or she may in the future in his    |
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 2|or her discretion choose to join and then disburse such funds as       |
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 3|provided by the Insurance Code and other applicable Oklahoma law.      |
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 4|    G.  Should the Insurance Commissioner exercise his or her sole     |
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 5|discretion and decide to join the Nonadmitted Insurance Multi-State    |
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 6|Agreement or any other multistate agreement or compact with the same   |
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 7|function and purpose, the Insurance Commissioner is authorized in      |
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 8|such circumstances to utilize or adopt any allocation schedule         |
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 9|included in the Nonadmitted Insurance Multi-State Agreement or any     |
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10|other multistate agreement or compact the Insurance Commissioner may   |
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11|enter in the exercise of his or her sole discretion and judgment       |
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12|which schedule has the function and purpose of allocating risk and     |
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13|computing the tax due on the portion of premium attributable to each   |
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14|risk classification and to each state where properties, risks or       |
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15|exposures are located.                                                 |
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16|    H.  Policies sold to federally recognized Indian tribes shall be   |
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17|reported as provided in Section 1107 of this title; however, these     |
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18|policies shall be exempt from the surplus line premium tax to the      |
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19|extent that the Insurance Commissioner can identify that coverage is   |
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20|for risks which are wholly owned by a tribe and located within         |
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21|Indian Country, as defined in Section 1151 of Title 18 of the United   |
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22|States Code.                                                           |
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arsid3637075 SB66 HFLR                                             Page 4
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 1|    I.  The surplus line premium tax on insurance on motor transit     |
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 2|operations conducted between this and other states shall be paid on    |
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 3|the total premium charged on all surplus line insurance less:          |
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 4|    1.  The portion of the premium charged for operations in other     |
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 5|states taxing the premium of an insured where Oklahoma is the home     |
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 6|state; or                                                              |
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 7|    2.  The premium for operations outside of this state of an         |
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 8|insured maintaining its headquarters office outside of this state      |
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 9|and branch office in this state.                                       |
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10|    J.  Flood insurance policies where Oklahoma is the home state of   |
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11|the insured and the insurance covers properties, risks, or exposures   |
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12|located in Oklahoma shall be exempt from the surplus line premium      |
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13|tax.                                                                   |
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14|    K.  Policies sold to any city or town in this state,               |
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15|incorporated pursuant to law, or to any school district, as defined    |
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16|in Section 1-108 of Title 70 of the Oklahoma Statutes, shall be        |
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17|exempt from the surplus lines premium tax.                             |
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18|    SECTION 2.  This act shall become effective November 1, 2021.      |
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20|COMMITTEE REPORT BY: COMMITTEE ON INSURANCE, dated 04/01/2021 - DO     |
  |PASS.                                                                  |
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arsid3637075 SB66 HFLR                                             Page 5
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