If you’re familiar with surplus lines tax filing, you already know that each state maintains its tax rates, deadlines, and regulatory requirements. But, in addition to keeping track of all these nuances, you must also be familiar with the surplus lines filing platform used by each state! This article will review the different surplus lines filing platforms and provide guidance on some of the distinctions you need to be aware of between the platforms and the states that use them.
Surplus Lines Filing Platforms:
There are four main surplus lines filing platforms you should be familiar with: OPTins, SLIP, SLAS Clearinghouse, and InsCipher.
OPTins - The Online Premium Tax for Insurance was developed by the National Association of Insurance Commissioners (NAIC) as a way for surplus line brokers to file and pay surplus lines taxes electronically. Today, there are twenty-one (21) states that utilize OPTins for payment of surplus line taxes. OPTins is used for submitting state tax reports and monies; it is not used to record or review surplus lines policies. It is strictly a platform for submitting the surplus line tax report as required by the state and receiving tax monies due for that reporting period. OPTins charges a per report transaction fee of 5% of the total tax amount due to the state up to, and not to exceed, $15.00 per surplus line tax report.
These monies are paid out-of-pocket by the surplus lines broker. For ‘Zero Business’ reports, the charge is $1.00 per tax report. Please note that the transaction fee is non-refundable.
SLIP – The Florida Surplus Lines Service Office developed the Surplus Lines Information Portal for surplus line brokers to submit policy information electronically. There are currently nine (9) states that utilize the SLIP filing platform, and seven (7) of the nine states utilize their state’s surplus lines association. These surplus lines associations assist the department of insurance in the regulation and compliance of surplus lines insurance by receiving, recording, and reviewing all surplus lines policies or documentation and provide assistance and information regarding the surplus lines market and laws. SLIP does not charge a per-transaction fee, and taxes can be paid directly through the SLIP portal.
SLAS Clearinghouse – The Florida Surplus Lines Service Office created the Surplus Lines Automation Suite Clearinghouse as a platform for member states to receive policy information and report and pay surplus line taxes. The Clearinghouse utilizes the SLIP platform, and currently, there are three (3) member states. The Clearinghouse does charge a per-transaction fee of 0.175% based on the premium amount, including return premiums.
InsCipher – InsCipher is unique because it provides a platform for states to use to submit policy data and the payment of surplus lines stamping fees; and for the state of Utah, the surplus lines taxes. Currently, two (2) states utilize the InsCipher Broker Portal as their state platform: Idaho and Utah. In addition, InsCipher has also developed a surplus lines management compliance software for surplus line brokers called InsCipher Connect. This software assists brokers and MGA’s in managing compliance requirements and reporting surplus lines taxes in all 50 states, plus D.C., Guam, Puerto Rico, and the Virgin Isles. What differentiates InsCipher from all other surplus lines filing platforms is that states, carriers, and brokers may all utilize the same software.
But wait, there’s more!
To further complicate matters, some states utilize one platform for reporting policy data and an entirely different platform for paying taxes. What’s more, some states require multiple reports to two (2) different state departments, the state department of insurance and the state department of revenue and tax.
Because all surplus lines brokers must account for every piece of business written through the surplus lines market--whether a new or renewal policy or an endorsement, it is imperative to know where and when surplus line taxes are due.
What Filing Platform Does Each State Use?
To help simplify the surplus lines filing process, we’ve created a free download that breaks down which states use which surplus lines filing platform. Fill out the form below to download your copy now!
InsCipher is an insurtech company providing software and services that are revolutionizing inefficient insurance processes. Save your agency time and money by automating surplus lines compliance, filing, and reporting. Want to learn more? Request a free demo today!