What is a Zero Report Filing?
Each state requires insurance companies to submit a variety of reports on a regular basis. These reports help the state monitor the business that is being done, as well as collect taxes on those transactions. A Zero Report is filed by a surplus lines licensee if they did not write any policies in a given period, whether it be a month, quarter, or year.
Understanding Zero Report Filings
If no surplus lines business was transacted during a particular period, filing a Zero Report may be required. The importance of a Zero Report is to help states know whether or not there was a premium written in a specific time frame. If there was a premium written, the state wants to collect taxes on that premium. Filing a Zero Report would indicate that there was no premium, and therefore no taxes to collect.
Currently, over half the states and territories in the US require zero report filings.
What are the penalties for not complying with surplus lines reporting requirements?
Penalties for surplus lines non-compliance can vary from state to state, but the most common infractions include penalties and additional fees, which will accrue interest if unpaid. If issues are not addressed, more severe penalties such as loss of business licenses and potential litigation are possible.
Related Terms
