MISSISSIPPI LEGISLATURE
2023 Regular Session
To: Insurance
By: Representative Busby
AN ACT TO AMEND SECTION 83-34-4, MISSISSIPPI CODE OF 1972, TO ANNUALLY DIVERT FORTY PERCENT OF THE NONADMITTED POLICY FEE TO FUND THE RURAL FIRE TRUCK AND SUPPLEMENTAL FUND; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 83-34-4, Mississippi Code of 1972, is amended as follows:
83-34-4. (1) Nonadmitted insurers shall not be assessable insurers of the association. All surplus lines insurance producers placing insurance through nonadmitted insurers shall collect from the insured and remit to the association a nonadmitted policy fee on all premiums for all insurance written by such surplus lines insurance producer for a policy from a nonadmitted insurer for any and all risks in this state, except that policies or portions thereof that cover residential earthquake risks or residential flood risks that are not written through the National Flood Insurance Program shall be exempt from the nonadmitted policy fee. By procuring or selling insurance on property in this state from a nonadmitted insurer, each surplus lines insurance producer placing insurance through a nonadmitted insurer agrees to be bound by the provisions of this chapter and to collect and remit the nonadmitted policy fee provided for herein.
(2) The nonadmitted policy fee shall be a percentage of the total policy premium but the nonadmitted policy fee shall not be considered premium and is not subject to premium taxes or commissions. However, failure to pay the nonadmitted policy fee shall be treated the same as failure to pay premium. "Total policy premium" includes taxes and commissions.
(3) The nonadmitted policy fee percentage shall be three percent (3%). The monies derived under this section shall be paid to a fund administered by the commissioner. Sixty percent (60%) of such funds shall be paid quarterly by the commissioner to the association for use in the manner prescribed in subsection (6) of this section and shall not be considered public funds; and the remaining forty percent (40%) of such funds shall be expended by the commissioner to the Rural Fire Truck Fund or Supplementary Rural Fire Truck Fund.
(4) Within twenty (20) days
of the end of the quarter, surplus lines insurance producers placing insurance through
nonadmitted insurers shall remit directly to the * * * commissioner all nonadmitted
policy fees collected in the preceding quarter. In addition to the nonadmitted
policy fee provided for herein, surplus lines insurance producers placing insurance
through nonadmitted insurers shall collect and remit excess deficit surcharges as
provided by this chapter. Surplus lines insurance producers placing insurance through
nonadmitted insurers may designate another surplus lines insurance producer that
actually procured the insurance from the nonadmitted carrier to collect and remit
the nonadmitted policy fees.
(5) Each insured in this state who directly procures or renews insurance with a nonadmitted insurer on properties, risks or exposures located or to be performed, in whole or in part, in this state, other than insurance procured through a surplus lines licensee, shall be subject to the nonadmitted policy fee which shall be paid by the insured according to the procedures provided for premium taxes in Section 83-21-17(5).
(6) Monies derived from
the nonadmitted policy fee collected under this section shall
not be considered public funds and may be used by the association, in addition
to any uses provided for in Section 83-34-3(4), for education, public outreach,
training of building officials and other programs targeted to reduce the number
of policies within the association * * *.
Further, beginning July 1, 2022, before any fees are remitted to the association
but only if the association will receive at least sixty percent (60%) of the fees,
Five Hundred Thousand Dollars ($500,000.00) shall be diverted and deposited annually
into the Mississippi First Responders Health and Safety Trust Fund created in Section
25-15-411. Further, beginning July 1, 2022, but only if the association will receive
at least sixty percent (60%) of the fees and the Mississippi First Responders Health
and Safety Trust Fund has received the diversion of Five Hundred Thousand Dollars
($500,000.00), Three Million Five Hundred Thousand Dollars ($3,500,000.00) shall
be diverted and deposited annually into the Annual Fire Fund created in Section
17-23-21. Further, beginning July 1, 2022, after the association has received sixty percent (60%) of the
fees and after all other diversions are made, fifty percent (50%) of any excess
amount shall be remitted to the association and fifty percent (50%) of any excess
amount shall be diverted and deposited annually into the Annual Fire Fund.
In the event the value of the association's Total Admitted Assets, as defined by the audited financial statement, is less than Two Hundred Fifty Million Dollars ($250,000,000.00), the monies diverted and not remitted to the association under this subsection (6) during that fiscal year and subsequent fiscal years shall immediately be diverted to the association and shall not be considered public funds.
(7) The association may use excess funds to purchase reinsurance in an amount that may exceed the total premiums collected from policyholders.
SECTION 2. This act shall take effect and be in force from and after July 1, 2023.