With the passage of the law, only the insured’s home state—where the buyer maintains its principal place of business—may require any premium tax or self procurement tax for non-admitted insurance.
Arthur Koritzinsky, managing director, Marsh Captive Advisory, added, “Dodd-Frank does not provide specific uniform procedures for states to report, pay, collect, and allocate the non-admitted premium tax due in the buyer’s home state. However, it is expected that the National Association of Insurance Commissioners (NAIC) will establish a multistate compact for the distribution of tax revenue for non-admitted lines.”
The timeline for the implementation of such a multi-state compact is still uncertain.