Date Requested:February 08, 2011
Time Requested:11:49 AM
Agency: Insurance Commission
CBD Number: Version: Bill Number: Resolution Number:
2011R2302 Introduced SB435
7152, 7155, 7158
Sources of Revenue
Special Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    SB 435 as proposed authorizes the Insurance Commissioner to enter into a multi-state agreement for the collection and disbursement of surplus lines taxes.
    The costs to the state is projected at $5,000 during the
    implementation year to provide for updating tax forms, instructions, remitter notices and systems programming for the new rate and process(this is a onetime cost).

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 5,000 0 0
Personal Services 0 0 0
Current Expenses 5,000 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    Tax forms, instructions and systems will need updated to incorporate the new rate. Additionally, notices to insurers and surplus lines licensees will need to be made to facilitate compliance with the new processes.
    Total onetime implementation costs for the state are estimated at $5,000.

Person submitting Fiscal Note:
Michael D Riley
Email Address:
    The Nonadmitted Reinsurance and Reform Act of 2010 (NRRA), which was incorporated intact into the Dodd-Frank Financial Reform Bill, HR 4173, provides that only an insured’s “home state” may require a premium tax payment for nonadmitted insurance. However, the NRRA authorizes states to enter into a compact with other states to allocate and receive those nonadmitted insurance premium taxes on multi-state policies. Without an agreement or mechanism enacted, the state would no longer receive these multi-state surplus lines premium taxes. West Virginia averages $5 to $6 million annually in total surplus lines collections. Taxes are assessed on single state and multi-state risks. The detail/percentage of the $5 to $6 million total that represents multi-state risks is not tracked and would require the individual review of each return to determine.