ENROLLED
H. B. 2757
(By Delegates Johnson, Capito and Beane)
[Passed March 12, 1999; in effect ninety days from passage.]
AN ACT to repeal section sixteen, article twelve, chapter thirty- three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; and to amend and reenact
section sixteen-a of said article, relating to insurance
excess line brokers, the fees they may charge and the
taxation of insurance placed through an excess line broker.
Be it enacted by the Legislature of West Virginia:
That section sixteen, article twelve, chapter thirty-three
of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be repealed; and that section sixteen-a
of said article be amended and reenacted to read as follows:
ARTICLE 12. AGENTS, BROKERS, SOLICITORS AND EXCESS LINE.
§33-12-16a. Excess line brokers; additional premium tax.
(a) Every excess line broker shall make an annual return, under oath, on or before the first day of March to the
commissioner of the gross amount of premiums charged by the
insurers and of the gross amount of the fees charged by the
excess line broker for the insurance procured by the excess line
broker during the previous calendar year. Every excess line
policyholder obtaining insurance from an excess line broker shall
pay and every excess line broker shall collect from the
policyholder and remit to the commissioner a sum equal to four
percent of the gross premiums and fees received on the excess
line policies procured by the excess line broker on subjects of
insurance, resident, located or to be performed in this state,
including any so-called dividends on participating policies
applied in reduction of premiums, but less premiums returned to
policyholders because of cancellation of policy. This tax is
imposed for the purpose of providing additional revenue for
municipal policemen's and firemen's pension and relief funds and
additional revenue for volunteer and part volunteer fire
companies and departments. This tax is required to be paid and
remitted, on a calendar year basis and in quarterly estimated
installments due and payable on or before the twenty-fifth day
of the month succeeding the close of the quarter in which they
accrued, except for the fourth quarter, in respect of which taxes
shall be due and payable and final computation of actual total
liability for the prior calendar year shall be made, less credit for the three quarterly estimated payments prior made, and filed
with the annual return to be made on or before the first day of
March of the succeeding year. Provisions of this chapter relating
to the levy, imposition and collection of the regular premium tax
are applicable to the levy, imposition and collection of this tax
to the extent that the provisions are not in conflict with this
section.
All such taxes remitted to the commissioner pursuant to this
section shall be paid by him into a special account in the state
treasury, designated "municipal pensions and protection fund,"
and after appropriation by the Legislature, shall be distributed
in accordance with the provisions of subsection (c), section
fourteen-d, article three of this chapter. The excess line broker
shall return to the policyholder the tax on any unearned portion
of the premium returned to the policyholder because of
cancellation of policy.
(b) The excess line broker may not:
(1) Pay directly or indirectly the tax or any portion
thereof, either as an inducement to the policyholder to purchase
the insurance or for any other reason; or
(2) Rebate all or part of the tax or the excess line
broker's commission, either as an inducement to the policyholder
to purchase the insurance or for any reason.
(c) The licensed excess line broker may charge the prospective policyholder a fee for the cost of underwriting,
issuing, processing, inspecting, service or auditing the policy
for placement with the excess line insurer if:
(1) The service is required by the excess line insurer;
(2) The service is actually provided by the excess line
broker or the cost of the service is actually incurred by the
excess line broker;
(3) The provision or cost of the service is reasonable,
documented and verifiable.
(d) The excess line broker shall make a clear and
conspicuous written disclosure to the policyholder of:
(1) The total amount of premium for the policy;
(2) Any fee charged;
(3) The total amount of any fee charged; and
(4) The total amount of tax on the premium and fee.
(e) The clear and conspicuous written disclosure required by
subsection (d) of this section is subject to the record
maintenance requirements of section fifteen of this article.