LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 462 HLS 21RS 193
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 16, 2021 2:43 PM Author: HUVAL
Dept./Agy.: Insurance
Subject: Surplus Line Tax on Unauthorized Insurance Analyst: Patrice Thomas
INSURANCE/SURPLUS LINE EN SEE FISC NOTE GF RV See Note Page 1 of 1
Provides relative to the tax on surplus lines and unauthorized insurance
Present law imposes an annual tax of 4.85% on the gross premium of surplus lines of insurance for Louisiana home state
policyholders. Proposed law expands the imposition of the tax to insurance placed through and directly by LA licensed
surplus lines brokers and unauthorized insurers (not licensed in LA) regardless of the covered property, risk, or exposure.
Proposed law requires surplus line brokers that do not have other unauthorized insurance premiums to report to be
exempted from the quarterly surplus line reporting requirement. Proposed law provides that each policyholder directly
placing insurance shall transmit a direct placement tax report to the commissioner and remit the tax payable within 30 days.
Proposed law provides that the commissioner shall develop the tax report. Proposed law authorizes the commissioner's
discretion to suspend or revoke the license of the delinquent surplus lines broker.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total
EXPENDITURE EXPLANATION
There is no anticipated direct material effect on governmental expenditures as a result of this measure. The proposed law
authorizes the Commissioner of Insurance to collect a tax on unauthorized insurance and impose penalties if the tax is not
paid within 30 days of procuring insurance. The LA Department of Insurance (LDI) reports that it is capable of handling any
workload impact arising from the proposed law with existing budgetary and personnel resources.
REVENUE EXPLANATION
Proposed law may create an indeterminable increase in State General Fund revenue. The proposed law expands the surplus
line tax of 4.85% to include unauthorized insurance for which Louisiana is the home state of the policyholder. The proposed
law provides that the tax shall be credited to the State General Fund. Also, the proposed law authorizes the Commissioner
of Insurance to impose a 10% penalty for failure to report or remit taxes and allows for waiver of the penalty under certain
circumstances. Since there are very few self-procured (direct placed) insurance policies reported, neither the LDI nor the
Legislative Fiscal Office can anticipate the number of unauthorized insurance reports that will be fined or penalties collected.
To the extent this measure increases the number of self-procured insurance that is reported, taxed, or penalized, state
general revenue will increase by an indeterminable amount.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Alan M. Boxberger
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director


Statutes affected:
HB462 Original: 22:439(A)(1)
HB462 Engrossed: 22:439(A)(1)
HB462 Enrolled: 22:439(A)(1)
HB462 Act : 22:439(A)(1)