136.392 Premium surcharge. - Kentucky Statutes

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Page 1 of 3 136.392 Premium surcharge. (1) (a) Every domestic, foreign, or alien insurer, other than life and health insurers, which is either subject to or exempted from Kentucky premium taxes as levied
pursuant to the provisions of either KRS 136.340, 136.350, 136.370, or
136.390, shall charge and collect a surcharge of one dollar and fifty cents
($1.50) upon each one hundred dollars ($100) of premium, assessments, or
other charges, except for those municipal premium taxes, made by it for
insurance coverage provided to its policyholders, on risk located in this state,
whether the charges are designated as premiums, assessments, or otherwise.
The premium surcharge shall be collected by the insurer from its
policyholders at the same time and in the same manner that its premium or
other charge for the insurance coverage is collected. The premium surcharge
shall be disclosed to policyholders pursuant to administrative regulations
promulgated by the commissioner of insurance. However, no insurer or its
agent shall be entitled to any portion of any premium surcharge as a fee or
commission for its collection. On or before the twentieth day of each month,
each insurer shall report and remit to the Department of Revenue, on forms as
it may require, all premium surcharge moneys collected by it during its
preceding monthly accounting period less any moneys returned to
policyholders as applicable to the unearned portion of the premium on policies
terminated by either the insured or the insurer. Insurers with an annual liability
of less than one thousand dollars ($1,000) for each of the previous two (2)
calendar years may report and remit to the Department of Revenue all
premium surcharge moneys collected on a calendar year basis on or before the
twentieth day of January of the following calendar year. The funds derived
from the premium surcharge shall be deposited in the State Treasury, and shall
constitute a fund allocated for the uses and purposes of the Firefighters
Foundation Program fund, KRS 95A.220 and 95A.262, and the Law
Enforcement Foundation Program fund, KRS 15.430. (b) Effective July 1, 1992, the surcharge rate in paragraph (a) of this subsection shall be adjusted by the commissioner of revenue to a rate calculated to
provide sufficient funds for the uses and purposes of the Firefighters
Foundation Program fund as prescribed by KRS 95A.220 and 95A.262 and
the Law Enforcement Foundation Program fund as prescribed by KRS 15.430
for each fiscal year. The rate shall be calculated using as its base the number
of local government units eligible for participation in the funds under
applicable statutes as of January 1, 1994. To allow the commissioner of
revenue to calculate an appropriate rate, the secretary of the Public Protection
Cabinet and the secretary for the Justice and Public Safety Cabinet shall
certify to the commissioner of revenue, no later than January 1 of each year,
the estimated budgets for the respective funds specified above, including any
surplus moneys in the funds, which shall be incorporated into the
consideration of the adjusted rate for the next biennium. As soon as practical,
the commissioner of revenue shall advise the commissioner of insurance of Page 2 of 3 the new rate and the commissioner shall inform the affected insurers. The rate
adjustment process shall continue on a biennial basis. (2) Within five (5) days after the end of each month, all insurance premium surcharge proceeds deposited in the State Treasury as set forth in this section shall be paid by
the State Treasurer into the Firefighters Foundation Program fund trust and agency
account and the Law Enforcement Foundation Program fund trust and agency
account. The amount paid into each account shall be proportionate to each fund's
respective share of the total deposits, pursuant to KRS 42.190. Moneys deposited to
the Law Enforcement Foundation Program fund trust and agency account shall not
be disbursed, expended, encumbered, or transferred by any state official for uses
and purposes other than those prescribed by KRS 15.410 to 15.500, except that
beginning with fiscal year 1994-95, through June 30, 1999, moneys remaining in
the account at the end of the fiscal year in excess of three million dollars
($3,000,000) shall lapse. On and after July 1, 1999, moneys in this account shall not
lapse. Money deposited to the Firefighters Foundation Program fund trust and
agency account shall not be disbursed, expended, encumbered, or transferred by any
state official for uses and purposes other than those prescribed by KRS 95A.200 to
95A.300, except that beginning with fiscal year 1994-95, through June 30, 1999,
moneys remaining in the account at the end of the fiscal year in excess of three
million dollars ($3,000,000) shall lapse, but moneys in the revolving loan fund
established in KRS 95A.262 shall not lapse. On and after July 1, 1999, moneys in
this account shall not lapse. (3) Insurance premium surcharge funds collected from the policyholders of any domestic mutual company, cooperative, or assessment fire insurance company shall
be deposited in the State Treasury, and shall be paid monthly by the State Treasurer
into the Firefighters Foundation Program fund trust and agency account as provided
in KRS 95A.220 to 95A.262. However, insurance premium surcharge funds
collected from policyholders of any mutual company, cooperative, or assessment
fire insurance company which transfers its corporate domicile to this state from
another state after July 15, 1994, shall continue to be paid into the Firefighters
Foundation Program fund and the Law Enforcement Foundation Program fund as
prescribed. (4) No later than July 1 of each year, the Department of Insurance shall provide the Department of Revenue with a list of all Kentucky-licensed property and casualty
insurers and the amount of premium volume collected by the insurer for the
preceding calendar year as set forth on the annual statement of the insurer. No later
than September 1 of each year, the Department of Revenue shall calculate an
estimate of the premium surcharge due from each insurer subject to the insurance
premium surcharge imposed pursuant to this section, based upon the surcharge rate
imposed pursuant to this section and the amount of the premium volume for each
insurer as reported by the Department of Insurance. The Department of Revenue
shall compare the results of this estimate with the premium surcharge paid by each
insurer during the preceding year and shall provide the Legislative Research
Commission, the Commission on Fire Protection Personnel Standards and
Education, the Kentucky Law Enforcement Council, and the Department of Page 3 of 3 Insurance with a report detailing its findings on a cumulative basis. In accordance
with KRS 131.190, the Department of Revenue shall not identify or divulge the
confidential tax information of any individual insurer in this report. (5) The insurance premiums surcharge provided in this section shall not apply to premiums collected from the following:
(a) The federal government;
(b) Resident educational and charitable institutions qualifying under Section 501(c)(3) of the Internal Revenue Code; (c) Resident nonprofit religious institutions for real, tangible, and intangible property coverage only; (d) State government for coverage of real property; or
(e) Local governments for coverage of real property. Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 101, effective July 15, 2010. -- Repealed and reenacted 2009 Ky. Acts ch. 86, sec. 1, effective March 24, 2009. -- Amended
2008 Ky. Acts ch. 132, sec. 1, effective April 24, 2008. -- Amended 2007 Ky. Acts
ch. 85, sec. 160, effective June 26, 2007. -- Amended 2005 Ky. Acts ch. 85, sec. 328,
effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 110, sec. 1, effective July 15,
2002. -- Amended 1998 Ky. Acts ch. 244, sec. 9, effective July 15, 1998; and
ch. 510, sec. 9, effective July 15, 1998. -- Amended 1994 Ky. Acts ch. 97, sec. 4,
effective July 15, 1994.