Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article VI - Corporation Taxes › Chapter 162 - INSURANCE COMPANIES SUBJECT TO TAX IN THIS COMMONWEALTH › Section 162.11 - Calculation of foreign title insurance company gross premiums

Current through Register Vol. 54, No. 28, July 13, 2024
(a) The following
					 words and terms when used in this section, have the following meanings:
Excess fee
-The difference between the
						all-inclusive fee for the actual liability covered by a title insurance policy
						and the all-inclusive fee for a hypothetical title insurance policy written to
						cover the maximum liability specified in the current approved attorney fee
						schedule.
(b) Except as
					 provided in subsection (c), gross premiums for all title insurance policies,
					 including policies issued under an all-inclusive fee schedule, shall be
					 calculated by applying the liability coverage to the insurer's approved
					 attorney fee schedule approved by the Insurance Department.
(c) The taxable premium for policies that are
					 written in excess of the maximum liability coverage amount specified in the
					 approved attorney fee schedule shall be calculated as follows:
(1) If the title insurance policy is written
					 under the approved attorney system, the taxable premium is the entire
					 fee.
(2) If the title insurance
					 policy is written under the all-inclusive system, the taxable premium is the
					 sum of the following:
(i) The approved
					 attorney fee for the maximum liability coverage specified in the approved
					 attorney fee schedule.
(ii) The
					 excess fee.
Example:
A title insurance policy is written with a liability
						coverage of $20 million. A fee of $38,583 is charged under the all-inclusive
						system. The approved attorney fee schedule is consulted, which for purposes of
						illustration, only, is as follows:
Unit of Insurance or Fraction
								Thereof
Fee
$0.00 to $15,000 ...
$45
$15,001 to $100,000 ...
Add $3 per
								$1,000
$100,001 to $500,000 ...
Add $2.50 per
								$1,000
$500,001 to $1,000,000 ...
Add $2 per
								$1,000
$1,000,001 and greater ...
Subject to
								negotiation
The $20 million liability of the policy exceeds the
						maximum liability specified in the approved attorney fee schedule of $1
						million. Under paragraph (2), the taxable premium is the sum of two components.
						First, under subparagraph (i), the maximum liability coverage specified is $1
						million and the corresponding fee totals $2,300. Second, the excess fee needs
						to be calculated utilizing fees in the all-inclusive fee schedule, which for
						purposes of illustration, only, is as follows:
Unit of Insurance or Fraction
								Thereof
Fee
$0.00 to $15,000 ...
$303
$15,001 to $35,000 ...
Add $7 per
								$1,000
$35,001 to $50,000 ...
Add $6 per $1,000
$50,001 to $100,000 ...
Add $5 per $1,000
$100,001 to $500,000 ...
Add $4.50 per
								$1,000
$500,001 to $1,000,000 ...
Add $3.50 per
								$1,000
$1,000,001 and greater ...
Subject to
								negotiation
Using the maximum liability coverage of $1 million, the
						corresponding fee totals $4,333. The excess fee under subparagraph (ii) is
						$34,250 ($38,583-$4,333). The taxable premium for the policy is the sum of the
						two components which is $36,550 ($2,300 + $34,250).