FAQ

Why is Oregon taxing Wet Marine & Transportation insurance written by nonadmitted/unauthorized insurers?

ORS 731.824 and 828 requires that each foreign and alien insurer providing Wet Marine and Transportation insurance to consumers in Oregon shall file a report annually on or before June 15 with the Director of DCBS and pay tax on underwriting profits on Wet Marine insurance. In 2018, DCBS confirmed that 824 & 828 also applied to nonadmitted/unauthorized insurers writing wet marine and transportation insurance for Oregon home state insureds. The 2019 Oregon Legislature passed HB 2787 which applies a tax of ¾ of 1% (0.0075) on gross premium. Gross premium includes all fees, dues, and assessments in addition to premium. This new tax applies to nonadmitted/unauthorized insurers and is in lieu of ORS 731.824 & 828.

When does HB 2787 take effect?

The tax applies to policies issued or renewed on or after January 1, 2020.

Who collects the taxes and makes the filing?

Each producer that places Wet Marine and Transportation insurance with a nonadmitted insurer shall collect from the insured taxes in addition to the gross amount of premiums and other charges. The producer shall report on insurance transacted during the previous 90 days and the report shall accompany the payment of tax due. The report must show the gross premiums, or return premiums and the amount of the tax.

Why the Surplus Line Association of Oregon?

HB 2787 stipulates that the Director may require insurance producers to file the report on a form the Director specifies or on a form prescribed by the Surplus Line Association of Oregon. Further, HB 2787 stipulates that the Surplus Line Association of Oregon may charge producers a fee for reviewing Wet Marine and Transportation insurance policies and for collecting, on behalf of the State, the taxes imposed. The Surplus Line Association of Oregon is an advisory organization to the DCBS and has been in business for 80 years performing a similar role for the State for surplus lines insurance policies.

What is the fee being charged by the Surplus Line Association of Oregon for their service?

To process and handle Wet Marine and Transportation filings the Surplus Line Association of Oregon will charge a flat $100 for every premium-bearing new policy, renewal, and endorsement. The tax of ¾ of 1% (0.0075) applied to gross premium does not apply to the service charge.