KRS § 136.392 — KY Code / Title XI / Chapter 136 / Section 136.392
136.392 Premium surcharge
Status: in_force

136.392 Premium surcharge.

(1) (a) Every domestic, foreign, or alien insurer, other than life and health insurers,

which is either subject to or exempted from Kentucky premium taxes as

levied pursuant to the provisions of either KRS 136.340, 136.350, 136.370, or

136.390, shall charge and collect a surcharge of one dollar and eighty cents

($1.80) upon each one hundred dollars ($100) of premium, assessments, or

other charges, except for those municipal premium taxes, made by it for

insurance coverage provided to its policyholders, on risk located in this state,

whether the charges are designated as premiums, assessments, or otherwise.

The premium surcharge shall be collected by the insurer from its

policyholders at the same time and in the same manner that its premium or

other charge for the insurance coverage is collected. The premium surcharge

shall be disclosed to policyholders pursuant to administrative regulations

promulgated by the commissioner of insurance. However, no insurer or its

agent shall be entitled to any portion of any premium surcharge as a fee or

commission for its collection. On or before the twentieth day of each month,

each insurer shall report and remit to the Department of Revenue, on forms as

it may require, all premium surcharge moneys collected by it during its

preceding monthly accounting period less any moneys returned to

policyholders as applicable to the unearned portion of the premium on

policies terminated by either the insured or the insurer. Insurers with an

annual liability of less than one thousand dollars ($1,000) for each of the

previous two (2) calendar years may report and remit to the Department of

Revenue all premium surcharge moneys collected on a calendar year basis on

or before the twentieth day of January of the following calendar year. The

funds derived from the premium surcharge shall be deposited in the State

Treasury, and shall constitute a fund allocated for the uses and purposes of the

Firefighters Foundation Program fund, KRS 95A.220 and 95A.262, and the

Law Enforcement Foundation Program fund, KRS 15.430.

(b) Effective July 1, 2019, the surcharge rate in paragraph (a) of this subsection

shall only be adjusted by an Act of the General Assembly, and the adjusted

rate shall be applied beginning ninety (90) days after the effective date of the

Act.

(2) Within five (5) days after the end of each month, all insurance premium surcharge

proceeds deposited in the State Treasury as set forth in this section shall be paid by

the State Treasurer into the Firefighters Foundation Program fund trust and agency

account and the Law Enforcement Foundation Program fund trust and agency

account. The amount paid into each account shall be proportionate to each fund's

respective share of the total deposits, pursuant to KRS 42.190. Moneys deposited to

the Law Enforcement Foundation Program fund trust and agency account shall not

be disbursed, expended, encumbered, or transferred by any state official for uses

and purposes other than those prescribed by KRS 15.410 to 15.500, except that

beginning with fiscal year 1994-95, through June 30, 1999, moneys remaining in

the account at the end of the fiscal year in excess of three million dollars

($3,000,000) shall lapse. On and after July 1, 1999, moneys in this account shall not

lapse. Money deposited to the Firefighters Foundation Program fund trust and

agency account shall not be disbursed, expended, encumbered, or transferred by any

state official for uses and purposes other than those prescribed by KRS 95A.200 to

95A.300, except that beginning with fiscal year 1994-95, through June 30, 1999,

moneys remaining in the account at the end of the fiscal year in excess of three

million dollars ($3,000,000) shall lapse, but moneys in the revolving loan fund

established in KRS 95A.262 shall not lapse. On and after July 1, 1999, moneys in

this account shall not lapse.

(3) Insurance premium surcharge funds collected from the policyholders of any

domestic mutual company, cooperative, or assessment fire insurance company shall

be deposited in the State Treasury, and shall be paid monthly by the State Treasurer

into the Firefighters Foundation Program fund trust and agency account as provided

in KRS 95A.220 to 95A.262. However, insurance premium surcharge funds

collected from policyholders of any mutual company, cooperative, or assessment

fire insurance company which transfers its corporate domicile to this state from

another state after July 15, 1994, shall continue to be paid into the Firefighters

Foundation Program fund and the Law Enforcement Foundation Program fund as

prescribed.

(4) No later than July 1 of each year, the Department of Insurance shall provide the

Department of Revenue with a list of all Kentucky-licensed property and casualty

insurers and the amount of premium volume collected by the insurer for the

preceding calendar year as set forth on the annual statement of the insurer. No later

than September 1 of each year, the Department of Revenue shall calculate an

estimate of the premium surcharge due from each insurer subject to the insurance

premium surcharge imposed pursuant to this section, based upon the surcharge rate

imposed pursuant to this section and the amount of the premium volume for each

insurer as reported by the Department of Insurance. The Department of Revenue

shall compare the results of this estimate with the premium surcharge paid by each

insurer during the preceding year and shall provide the Legislative Research

Commission, the Kentucky Fire Commission, the Kentucky Law Enforcement

Council, and the Department of Insurance with a report detailing its findings on a

cumulative basis. In accordance with KRS 131.190, the Department of Revenue

shall not identify or divulge the confidential tax information of any individual

insurer in this report.

(5) The insurance premiums surcharge provided in this section shall not apply to

premiums collected from the following:

(a) The federal government;

(b) Resident educational and charitable institutions qualifying under Section

501(c)(3) of the Internal Revenue Code;

(c) Resident nonprofit religious institutions for real, tangible, and intangible

property coverage only;

(d) State government for coverage of real property; or

(e) Local governments for coverage of real property.

(6) Pursuant to the Non-Admitted and Reinsurance Reform Act of 2010, Title V,

Subtitle B, of the Dodd-Frank Wall Street Reform and Consumer Protection Act,

Pub. L. No. 111-203, the insurance premium surcharge on non-admitted insurance

for multistate risks shall be exempt from the provisions of this section but shall be

subject to the provisions of KRS 304.10-180.