1 STATE OF OKLAHOMA
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2 1st Session of the 58th Legislature (2021)
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3 SENATE BILL 66 By: Haste
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6 AS INTRODUCED
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7 An Act relating to insurance premium taxes; amending
7 36 O.S. 2011, Section 1115, as last amended by
8 Section 1, Chapter 271, O.S.L. 2017 (36 O.S. Supp.
8 2020, Section 1115), which relates to surplus lines
9 coverage; creating exemption for certain policies;
9 and providing an effective date
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12 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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13 SECTION 1. AMENDATORY 36 O.S. 2011, Section 1115, as
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14 last amended by Section 1, Chapter 271, O.S.L. 2017 (36 O.S. Supp.
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15 2020, Section 1115), is amended to read as follows:
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16 Section 1115. A. Where Oklahoma is the home state of the
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17 insured, every person licensed pursuant to Section 1106 of this
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18 title shall collect and pay as provided in this section a sum for
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19 premium tax based on the total gross premiums charged in connection
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20 with any broker-procured surplus lines insurance, less any return
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21 premiums, for surplus lines insurance sold to the Oklahoma home-
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22 state insureds by the surplus lines broker or licensee.
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23 B. Where Oklahoma is the home state of the insured and the
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24 insurance covers properties, risks or exposures located or to be
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 1 performed both in and out of Oklahoma, the sum payable to the
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2 Oklahoma Insurance Commissioner shall be computed based on an amount
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3 equal to six percent (6%) of the total gross premiums whether the
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4 properties, risks or exposures are located or to be performed inside
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5 or outside Oklahoma. Any such unearned gross premium credited by
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6 the state to the surplus lines broker or licensee shall be returned
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7 to the policyholder by the broker or licensee. The surplus lines
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8 licensee or broker is prohibited from rebating, for any reason, any
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9 part of the tax.
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10 C. Where Oklahoma is the home state of the insured, gross
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11 premiums charged for independently procured insurance, less any
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12 return premiums, are subject to a premium tax at the rate of six
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13 percent (6%) payable to the Oklahoma Insurance Commissioner, whether
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14 the properties, risks or exposures are located or to be performed
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15 inside or outside Oklahoma.
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16 D. The Insurance Commissioner is authorized, in the exercise of
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17 his or her sole discretion and judgment, to participate in the
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18 Nonadmitted Insurance Multi-State Agreement or any other multistate
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19 agreement or compact with the same function and purpose for the
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20 function of collecting and disbursing to reciprocal states any funds
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21 collected pursuant to the Unauthorized Insurers and Surplus Lines
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22 Insurance Act applicable to other properties, risks or exposures
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23 located or to be performed outside of Oklahoma. Until such time as
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24 the Insurance Commissioner may, while not being required to, join
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 1 such multistate agreement or compact, premium taxes relating to
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2 Oklahoma home-state insureds shall continue to be paid and accounted
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3 for by nonadmitted insurers through their surplus lines licensees
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4 and brokers as provided in subsections A through C of this section.
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5 E. When the surplus lines coverage of an Oklahoma home-state
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6 insured covers properties, risks or exposures located only in
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7 Oklahoma, the surplus lines licensee or broker or self-procuring
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8 insured shall pay the surplus lines premium tax payable on such
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9 Oklahoma-only risks solely to the Oklahoma Insurance Commissioner.
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10 F. Should the Insurance Commissioner exercise his or her sole
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11 discretion and judgment and decide to join the Nonadmitted Insurance
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12 Multi-State Agreement or any other multistate agreement or compact
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13 with the same function and purpose, the Insurance Commissioner is
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14 authorized in such event to establish a uniform, statewide rate of
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15 taxation applicable to lines of nonadmitted insurance. This rate
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16 shall encompass all existing rates of taxation, fees and assessments
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17 imposed by this state, pursuant to subsections A through C of this
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18 section and the Insurance Commissioner shall document the method by
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19 which the statewide rate is calculated. The Insurance Commissioner
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20 is authorized to receive any monies obtained as premium tax received
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21 through any multistate agreement he or she may in the future in his
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22 or her discretion choose to join and then disburse such funds as
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23 provided by the Insurance Code and other applicable Oklahoma law.
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 1 G. Should the Insurance Commissioner exercise his or her sole
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2 discretion and decide to join the Nonadmitted Insurance Multi-State
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3 Agreement or any other multistate agreement or compact with the same
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4 function and purpose, the Insurance Commissioner is authorized in
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5 such circumstances to utilize or adopt any allocation schedule
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6 included in the Nonadmitted Insurance Multi-State Agreement or any
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7 other multistate agreement or compact the Insurance Commissioner may
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8 enter in the exercise of his or her sole discretion and judgment
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9 which schedule has the function and purpose of allocating risk and
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10 computing the tax due on the portion of premium attributable to each
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11 risk classification and to each state where properties, risks or
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12 exposures are located.
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13 H. Policies sold to federally recognized Indian tribes shall be
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14 reported as provided in Section 1107 of this title; however, these
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15 policies shall be exempt from the surplus line premium tax to the
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16 extent that the Insurance Commissioner can identify that coverage is
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17 for risks which are wholly owned by a tribe and located within
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18 Indian Country, as defined in Section 1151 of Title 18 of the United
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19 States Code.
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20 I. The surplus line premium tax on insurance on motor transit
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21 operations conducted between this and other states shall be paid on
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22 the total premium charged on all surplus line insurance less:
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 1 1. The portion of the premium charged for operations in other
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2 states taxing the premium of an insured where Oklahoma is the home
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3 state; or
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4 2. The premium for operations outside of this state of an
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5 insured maintaining its headquarters office outside of this state
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6 and branch office in this state.
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7 J. Flood insurance policies where Oklahoma is the home state of
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8 the insured and the insurance covers properties, risks, or exposures
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9 located in Oklahoma shall be exempt from the surplus line premium
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10 tax.
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11 K. Policies sold to any city or town in this state,
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12 incorporated pursuant to law, or to any school district, as defined
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13 in Section 1-108 of Title 70 of the Oklahoma Statutes, shall be
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14 exempt from the surplus lines premium tax.
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15 SECTION 2. This act shall become effective November 1, 2021.
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17 58-1-565 CB 12/1/2020 11:18:20 AM
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Statutes affected:
Introduced: 36-1115
Floor (House): 36-1115
Floor (Senate): 36-1115
Engrossed: 36-1115
Amended And Engrossed: 36-1115
Enrolled (final version): 36-1115