Surplus Lines
                  Associates

Revised 5/6/2013                               

       Kentucky                                                                  Back To Map
Tax Rate:   3%   includes policy fees
Stamping Fee  None
Surcharges / Assessments

 1.8% Policies Eff 4/1/2010         1.5% surcharge expired 3/31/2010            3 – 10% Municipal Tax   
  Use Our KY Municipal Tax Calculator  7/1/2013 - 14
  7/1/2012 - 13      7/1/2011 - 12     
7/1/2010 -11    

       Monthly Surcharge Report
          http://revenue.ky.gov/NR/rdonlyres/8241E817-AFC0-4D1A-8493-9788793775F5/0/74A118MonthlyInsuranceSurchargeReport410andAfter411.pdf
       Surcharge Exemptions :http://revenue.ky.gov/business/Insprem.htm   
       General Information   http://insurance.ky.gov/Static_Info.aspx?Static_ID=18&Div_id=15
       Local Government Tax General Info
  http://insurance.ky.gov/Home.aspx?Div_ID=13
       Commonwealth Office of Technology Map: http://kygeonet.ky.gov/tcm/index.html  (Location Search)

 Beginning July 21, 2011, the municipal tax continues to apply to single-state risks and multi-state risks where Kentucky is the home state.  Any applicable local government premium tax will be based on the portion of risk within the local government boundaries.

Note on KY Municipal Tax and Commissions
- The tax required by KRS 91A.080 is a tax on premium but is not considered a part of the premium, with some exception.  The term "premium" is defined by KRS 304.14-030. That definition does not include "taxes" as part of the premium.  A link to the statute is below.    
From the KY DOI;
"With respect to the issue presented, the office would not prohibit the payment of commissions with the tax included as a part of the premium.  However, KRS 304.14-030 would be sufficient to justify a company excluding the tax amount from the "premium" for the purpose of commission calculation".
 
http://www.lrc.state.ky.us/KRS/304-14/030.PDF 

* NRRA Allocation

         
Effective
          6/8/2011
* DOI Advisory Bulletin 2011-04: http://insurance.ky.gov/Documents/AdvOp11_04NonAdmitIns060611.pdf
Single State Risks

 
Amended Section 304.10-180 Single-state surplus lines premiums on risks located solely in Kentucky would remain subject to the following three taxes as under current statute: the 3% state premiums tax, the 1.8% state premiums surcharge, and the local premiums taxes.
 Multi State Risks - KY Home State
Beginning July 21, 2011, the 3% surplus lines tax and the 1.8% premium surcharge will be based on the full premium rather than based on the portion of the premium allocated to Kentucky risks.  Any applicable local government premium tax will be based on the portion of risk within the local government boundaries.
 Multi State - KY Not Home State

If a clearinghouse is operational, for multi-state risks, surplus lines brokers would pay a single 11.8% Kentucky tax to a national clearinghouse in accordance with the uniform rules and allocation formula adopted as part of the compact.

Final Bill with amendments
http://www.lrc.ky.gov/record/11rs/HB167.htm 
Filing Deadline:

Pursuant to KRS 304.10-050 and 806 KAR 10:050 surplus lines brokers must report every premium-bearing surplus lines transaction within 60 days of the transaction (90 days if placed with an alien insurer) by one of two methods:

  • electronically, using DOI's eServices site; or,
  • by submitting a paper affidavit for Surplus Lines Transactions (Form S.L 1) and other supporting documentation.
Affidavit:

Yes     within 60 days  
    Procedure   http://insurance.ky.gov/Static_Info.aspx?Static_ID=18&Div_id=15
       Form         http://insurance.ky.gov/Documents/SL_affidavit_w_lobrevwoutloc0608.pdf
       Inst           http://insurance.ky.gov/Static_Info.aspx?Static_ID=18&Div_id=15

Effective on and after 7/1/2010, affidavits must be filed electronically through the Department's
website at:      https://insurance.ky.gov/eservices/default.aspx

or File Transfer Protocol (FTP upload) through prior arrangement with the Department. 

To File the affidavit on line, click on eServices.     User name and password are required.
To obtain affidavit information and forms, go to:
     http://insurance.ky.gov/Docs.aspx?Div_id=15#27
     Scroll down to Surplus Lines Broker Documents.  
Eff 7/21/2011 NRRA Exempt Commercial Purchaser is exempt from due diligence requirements
Export List  No   http://www.lrc.state.ky.us/KRS/304-10/040.PDF
Courtesy filings:     No
Direct Procurement:  No  
Late Filing Fees:

 304.4-040 Revocation of authority for failure to pay    http://www.lrc.state.ky.us/KRS/304-04/040.PDF

Filing Requirements:

Affidavit online or paper within 60 days.   Quarterly within 30 days
    The Surplus Lines Broker Quarterly Report can be downloaded from

http://insurance.ky.gov/Documents/slquarsta0608.pdf

     Procedures for completing the Quarterly Report can be downloaded from

http://insurance.ky.gov/Documents/SLBinfo072908.pdf

Surplus Lines Broker Quarterly Report, KY S.L.Q.R. Form 2 is used to report and remit surplus lines taxes,
and are due on a quarter-in-arrears basis (KRS 304.10-180 and 806 KAR 10:030).  Brokers must submit a report even when there are no transactions during the reporting period.  Quarterly tax reports may not be
submitted electronically.

Note: Brokers/Agents with an annual liability of less than $1,000 for each of the previous two calendar years may report 
            and remit to the Department of Revenue all premium surcharge monies collected on a calendar year basis on or
            before the 20th day of January of the following year.
            If your annual tax liability was greater than $1,000 for the previous 2 calendar years you are required to report
            and pay your surplus lines taxes and surcharges collected monthly on or before the 20th.
* If you are reporting monthly and have no premiums or surcharges to report a zero report is required

Monthly Surcharge Report: http://revenue.ky.gov/forms/2012iptsforms.htm

Local Government Premium Tax  -  Annual Report due by March 31st  -  Zero Report Required
 An annual reporting of this tax must be sent each year to the DOI by March 31, concerning the tax paid in the preceding year.  This report must be filed electronically. There is a $5 filing fee.  An advisory bulletin concerning this topic can be found at:
http://insurance.ky.gov/Bulletin.aspx (Bulletin 09-03)
 Instructions on how to file electronically can be found at:
http://insurance.ky.gov/Docs.aspx?Div_ID=13 (Annual Reconciliation Electronic Submission)

Annual Municipal Tax Reconciliation (LGT 140) Forms and Instructions: http://insurance.ky.gov/Docs.aspx?Div_ID=13

 A hard copy of the tax payment and all quarterly and annual reports will need to be sent to the taxing entity (city or county).

Download Forms:

 Instructions  http://insurance.ky.gov/Docs.aspx?Div_id=15#37

 Broker Quarterly Report  http://insurance.ky.gov/Documents/slquarsta0608.pdf

KY Surcharge report  http://revenue.ky.gov
 KY Revenue Dept Premium and Surcharge Forms: http://revenue.ky.gov/forms/2012iptsforms.htm  78A118
  Note: Brokers/Agents with an annual liability of less than $1,000 for each of the previous two calendar years may report 
            and remit to the Department of Revenue all premium surcharge monies collected on a calendar year basis on or
            before the 20th day of January of the following year.
            If your annual tax liability was greater than $1,000 for the previous 2 calendar years you are required to report
            and pay your surplus lines taxes and surcharges collected monthly on or before the 20th.
 *   Form and Instructions:      http://revenue.ky.gov/forms/curyrfrms.htm
       http://revenue.ky.gov/NR/rdonlyres/8241E817-AFC0-4D1A-8493-9788793775F5/0/74A118MonthlyInsuranceSurchargeReport410andAfter411.pdf
                                       If you are reporting Monthly a Zero report is required

 
Note: There is a Monthly (74A118) and Annual Calendar Year (74A118A due Jan 20th) report.

Annual Municipal Tax Reconciliation (LGT 140) Forms and Instructions: http://insurance.ky.gov/Docs.aspx?Div_ID=13

Surplus Lines Association

Kentucky Surplus Lines Assn
c/o W.E. Kingsley Co.
PO Box 22700
Lexington, KY 40522

Department of Insurance website:   http://insurance.ky.gov/
Surplus Lines Law:  CHAPTER 304 Insurance Code   http://insurance.ky.gov/laws.aspx?Div_id=2
Exemptions: Exemptions to Tax Liability
No license fee or tax shall apply to premiums received on the following policies:
• Workers compensation insurance;
• Federal flood insurance;
• Municipal bonds, leases or other debt instruments issued by or on behalf of the municipality;
• Entities issued a certificate of authority to do business in Kentucky as a captive insurer pursuant to KRS 304.49-010;
No
county may impose the tax authorized by KRS 91A.080 upon premiums received on policies issued to public service companies which pay ad valorem taxes.
State list of eligible surplus lines companies  http://insurance.ky.gov/Company/Default.aspx?MenuID=47&Div_id=2
Policy Stamp/Surplus Lines wording:  “This insurance has been placed with an insurer not licensed to transact business in the Commonwealth of Kentucky but eligible as a surplus lines insurer. The insurer is not a member of the Kentucky Insurance Guaranty Association. Should the insurer become insolvent, the protection and benefits of the Kentucky Insurance Guaranty Association are not available.”
Revision History 12/21/2012 - Update link to Monthly Surcharge Report
                       Added link to Surcharge Exemptions
                       Added link to Current Forms page
5/6/2013 - Added link to 2013-14 Municipal Tax Calculator
         Surplus Lines Associates, LLC   © 2009 

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