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Information Regarding Surplus Lines Producers and Louisiana’s Implementation of the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA)

July 22, 2011

Effective July 21, 2011, producers should follow these instructions to collect surplus lines taxes on multi-state surplus lines policies where Louisiana is the home state as defined in the NRRA.
The producer must collect surplus lines taxes for Louisiana at the 5% rate for the portion of the risk that is allocable to Louisiana.  The producer must collect surplus lines taxes for the portions of the risk allocable to each state that is a member of the Nonadmitted Insurance Multi-State Agreement (NIMA) at the blended rate for each NIMA state.  For the portion of the policy risk that is allocable to states not participating in NIMA, no surplus lines tax should be charged or remitted. 

There will be a clearinghouse set up by NIMA to collect the multi-state surplus lines taxes.  It is the intent of the Louisiana Department of Insurance that producers collect the multi-state taxes and remit them to the NIMA clearinghouse using the forms provided by the clearinghouse.  Additional instructions will be issued once the clearinghouse is set up and operating.  Do not remit surplus lines taxes on multi-state policies to the Louisiana Department of Insurance. Producers should hold the tax money until the NIMA clearinghouse is operational.
As of July 20, 2011, the following jurisdictions have joined NIMA: Alaska, Connecticut, Florida, Hawaii, Louisiana, Mississippi, Nebraska, Nevada, Puerto Rico, South Dakota, Utah, and Wyoming.
For single-state surplus lines policies, where all of the risk is in Louisiana, continue using the Form 1265 and Form 1265B in the usual manner.

If you need more information about Louisiana’s implementation of the NRRA, please contact Tommy Coco, Director of the Tax Division of the Louisiana Department of Insurance at tcoco@ldi.state.la.us or (225) 342-1012.

Press Release 7-25-11- Louisiana Joins NIMA, Membership Grows to 11 States and Puerto Rico

NIMA Website