An Act
ENROLLED SENATE
BILL NO. 66 By: Haste of the Senate
and
Sims of the House
An Act relating to insurance premium taxes; amending
36 O.S. 2011, Section 1115, as las t amended by
Section 1, Chapter 271, O.S.L. 2017 (36 O.S. Supp.
2020, Section 1115), which relates to surplus lines
coverage; creating exemption for certain policies;
and providing an effective date .
SUBJECT: Insurance premium tax
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2011, Section 1115, as
last amended by Section 1, Chapter 271, O.S.L. 2017 (36 O.S. Supp.
2020, Section 1115), is amended to read as follo ws:
Section 1115. A. Where Oklahoma is the home state of the
insured, every person licensed pursuant to Section 1106 of this
title shall collect and pay as provided in this section a sum for
premium tax based on the total gross premiums charged in connec tion
with any broker-procured surplus lines insurance, less any return
premiums, for surplus lines insurance sold to the Oklahoma home-
state insureds by the surplus lines broker or licensee.
B. Where Oklahoma is the home state of the insured and the
insurance covers properties, risks or exposures located or to be
performed both in and ou t of Oklahoma, the sum payable to the
Oklahoma Insurance Commissioner shall be computed based on an amount
ENR. S. B. NO. 66 Page 2
equal to six percent ( 6%) of the total gross premiums whether the
properties, risks or exposures are located or to be performed inside
or outside Oklahoma. Any such unearned gross premium credited by
the state to the surplus lines broker or licensee shall be returned
to the policyholder by the broker or licensee. The surplus lines
licensee or broker is prohibited from rebating, for any reason, any
part of the tax.
C. Where Oklahoma is the home state of the insured, gross
premiums charged for independently procured insurance, less any
return premiums, are subject to a premium tax at the rate of six
percent (6%) payable to the Oklahoma Insurance Commis sioner, whether
the properties, risks or exposures are located or to be performed
inside or outside Oklahoma.
D. The Insurance Commissioner is authorized, in the exercise of
his or her sole discretion and judgment, to participate in the
Nonadmitted Insurance Multi-State Agreement or any other mu ltistate
agreement or compact with the same function and purpose for the
function of collecting and disbursing to reciprocal states any funds
collected pursuant to the Unauthorized Insurers and Surplus Lines
Insurance Act applicable to other properties, ri sks or exposures
located or to be performed outside of Oklahoma. Until such time as
the Insurance Commissioner may, while not bein g required to, join
such multistate agreement or compact, premium taxes relating to
Oklahoma home-state insureds shall contin ue to be paid and accounted
for by nonadmitted insurers through their surplus lines lice nsees
and brokers as provided in subsection s A through C of this section.
E. When the surplus lines coverage of an Oklahoma ho me-state
insured covers properties, risk s or exposures located only in
Oklahoma, the surplus lines licensee or broker or self -procuring
insured shall pay the surplus lines premium tax payable on such
Oklahoma-only risks solely to the Oklahoma Insurance Com missioner.
F. Should the Insurance Com missioner exercise his or her sole
discretion and judgment and decide to join the Nonadmit ted Insurance
Multi-State Agreement or any other multistate agreement or compact
with the same function and purpose, the Insura nce Commissioner is
authorized in such event to establish a uniform, statewide rate of
taxation applicable to lines of nonadmitte d insurance. This rate
shall encompass all existing rates of taxation, fees and assessments
ENR. S. B. NO. 66 Page 3
imposed by this state, pursuant to subsections A through C of this
section and the Insurance Commissioner shall document the method by
which the statewide rate is calculated. The Insurance Commissioner
is authorized to receive any monies obtained as premium tax received
through any multistate agreement he or she may in the fut ure in his
or her discretion choose to join and then disburse such funds as
provided by the Insurance Code and other applicable Oklah oma law.
G. Should the Insurance Commissioner exercise his or her sole
discretion and decide to join the Nonadmitted Insu rance Multi-State
Agreement or any other multistate agreement or compact with the same
function and purpose, the Insurance Commissione r is authorized in
such circumstances to utilize or adopt any allocation schedule
included in the Nonadmitted Insurance Mu lti-State Agreement or any
other multistate agreement or compact the Insurance Commissioner may
enter in the exercise of his or her so le discretion and judgment
which schedule has the function and purpose of allocating risk and
computing the tax due on the portion of premium attributable to each
risk classification and to each state where proper ties, risks or
exposures are located.
H. Policies sold to federally recognized Indian tribes shall be
reported as provided in Section 1107 of this title; however, these
policies shall be exempt from the surplus line premium tax to the
extent that the Insu rance Commissioner can identify that covera ge is
for risks which are wholly owned by a tribe and located within
Indian Country, as defined in Section 1151 of Title 18 of the United
States Code.
I. The surplus line premium tax on insurance on motor transit
operations conducted between this and othe r states shall be paid on
the total premium charged on all surplus line insurance le ss:
1. The portion of the premium charged for operations in other
states taxing the premium of an insured where Oklahoma is the home
state; or
2. The premium for operatio ns outside of this state of an
insured maintaining its headquarters office outside o f this state
and branch office in this state.
ENR. S. B. NO. 66 Page 4
J. Flood insurance policies where Oklahoma is the home state of
the insured and the insurance covers properties, risks , or exposures
located in Oklahoma shall be exempt from the surplus line premium
tax.
K. Policies sold to any city or town in this state,
incorporated pursuant to law, or to any school district, as defined
in Section 1-108 of Title 70 of the Oklahoma Statutes, shall be
exempt from the surplus lines premium tax.
SECTION 2. This act shall become effective November 1, 2021.
ENR. S. B. NO. 66 Page 5
Passed the Senate the 19th day of May, 2021.
Presiding Officer of the Senate
Passed the House of Representatives the 25th day of May, 2021.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governor of the State of Oklahoma this _____ ____
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _______________________________ __