Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 3 - TAX ADMINISTRATION › Subchapter GG - INSURANCE TAX › Section 3.822 - Basis and Reporting of Surplus Lines Premium Tax, the Allocation of Premium for Surplus Lines and Independently Procured Premium Tax, and Multiple Agent Transactions for Surplus Lines Insurance

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Definitions. The following words and terms, when used in this section, shall
				  have the following meanings, unless the context clearly indicates otherwise.
(1) Exempt premiums--If a surplus lines
				  policy covers risks or exposures that are properly allocated to federal waters,
				  international waters, or risks or exposures that are under the jurisdiction of
				  a foreign government, then the premiums on such policies or portions of such
				  policies are not taxable in Texas.
(2) Federal preemptions to state taxation for
				  surplus lines insurance--Federal preemptions from state taxation exist for
				  premiums on policies that are issued for the following entities:
(A) The Federal Deposit Insurance Corporation
				  (FDIC), when it acts as the receiver of a failed financial institution that
				  holds the property being insured;
(B) The National Credit Union Administration;
				  and
(C) A federally chartered
				  credit union.
(3)
				  Multiple agent transaction--A transaction in which two or more agents, each
				  acting as a surplus lines agent of record, place portions of the total
				  insurance coverage, under a cover note or under a subscription policy, for a
				  single insured.
(4) Premium
				  received--The total gross amount of premium that is collected for the coverage
				  that the contract or policy provides, which includes, but is not limited to,
				  premiums, membership fees, assessments, dues, policy fees, or any other
				  consideration for insurance. This amount includes agent fees that are charged
				  in addition to, or in lieu of, a commission. Premium received does not include
				  any separately billed finance charge that is associated with the financing of
				  the premium.
(5) Premium
				  written--The total gross amount of premium for the coverage that the insurance
				  contract or policy provides, which includes, but is not limited to, premiums,
				  membership fees, assessments, dues, policy fees, or any other consideration for
				  insurance that is billed to the insured. This amount includes agent fees that
				  are charged in addition to, or in lieu of, a commission. Premium written does
				  not include any separately billed finance charge that is associated with the
				  financing of the premium.
(6)
				  Properly allocated and apportioned -The division or distribution of premium
				  among or between the various locations afforded coverage under the insurance
				  contract. This distribution of premium must comply with the methods that this
				  section describes.
(7) Surplus
				  lines agent or agency--An agent or agency that holds a surplus lines license
				  that this state has issued pursuant to Insurance Code, Article
				  1.14-2.
(8) Surplus lines agent of
				  record--The Texas licensed surplus lines agent who places a policy with an
				  eligible surplus lines insurer, or the Texas licensed surplus lines agent who
				  transacts business directly with an out-of-state agent not licensed by Texas as
				  a surplus lines agent to obtain coverage with an eligible surplus lines
				  insurer. The agent in these situations is the agent of record for such agent's
				  portion of the premium for the policy placement.
(9) Taxable surplus lines premium--For
				  surplus lines taxation purposes, except for exempt or federally pre-empted
				  premiums, surplus lines premium is taxable under Insurance Code, Article
				  1.14-2, §12(a).
(10) Texas
				  waters--Waters within 10.359 statute miles or nine nautical miles from the
				  Texas coastline.