Kentucky Statutes 136.392 – Premium surcharge
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(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 eighty cents ($1.80) 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 KRS § 95A.262, and the Law Enforcement Foundation Program fund, KRS § 15.430.
(b) Effective July 1, 2019, the surcharge rate in paragraph (a) of this subsection shall only be adjusted by an Act of the General Assembly, and the adjusted rate shall be applied beginning ninety (90) days after the effective date of the Act.
(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 KRS § 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 KRS § 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 Kentucky Fire Commission, the Kentucky Law Enforcement Council, and the Department of 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.
(6) Pursuant to the Non-Admitted and Reinsurance Reform Act of 2010, Title V, Subtitle B, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, the insurance premium surcharge on non-admitted insurance
for multistate risks shall be exempt from the provisions of this section but shall be subject to the provisions of KRS § 304.10-180.
Effective: July 15, 2020
History: Amended 2020 Ky. Acts ch. 67, sec. 17, effective July 15, 2020. — Amended
2019 Ky. Acts ch. 140, sec. 1, effective June 27, 2019. — Amended 2012 Ky. Acts ch. 80, sec. 1, effective July 12, 2012. — Amended 2011 Ky. Acts ch. 48, sec. 3, effective June 8, 2011. — 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. – Amended 1992 Ky. Acts ch.
338, sec. 17, effective July 14, 1992; and ch. 381, sec. 1, effective July 14, 1992. — Amended 1990 Ky. Acts ch. 481, sec. 3, effective July 13, 1990. — Amended 1986
Ky. Acts ch. 425, sec. 1, effective July 15, 1986. — Amended 1984 Ky. Acts ch. 300, sec. 1, effective July 13, 1984; and ch. 332, sec. 16, effective July 13, 1984. — Created 1982 Ky. Acts ch. 246, sec. 1, effective April 1, 1982.
2022-2024 Budget Reference. See State/Executive Branch Budget, 2022 Ky. Acts ch.
199, Pt. V, B, 1 at 1757.
Legislative Research Commission Note (6/8/2011). A reference in subsection (6) of this statute to “Pub. L. No. 111-517,” the Non-Admitted and Reinsurance Reform Act of 2010, Title V, Subtitle B, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, has been changed in codification to “Pub. L. No. 111-203” to correct a manifest clerical or typographical error under the authority of KRS
7.136(1).
Legislative Research Commission Note (6/8/2011). 2011 Ky. Acts ch. 48, sec. 5, provided that the provisions contained in Sections 2, 3, and 4 of that Act “shall take effect as provided in Article XIII of Section 1 of this Act, upon legislative enactment of the compact into law by two compacting states, provided the commission shall become effective for purposes of adopting rules, and creating the clearinghouse when there are a total of ten compacting states and contracting states or, alternatively, when there are compacting states and contracting states representing greater than 40 percent of the surplus lines insurance premium volume based on records of the percentage of surplus lines insurance.” The Reviser of Statutes has determined that, as of April 8, 2011, two states had enacted the compact, thereby triggering the initial effective date of the compact. Since 2011 Ky. Acts ch. 48, did not contain an emergency clause, this section became effective June 8, 2011, the normal effective date for 2011 legislation.
Legislative Research Commission Note (3/24/2009). 2009 Ky. Acts ch. 86, sec. 17, provides that “The intent of the General Assembly in repealing and reenacting KRS
136.392, 138.195, 141.160, 160.6156, 160.6157, 160.6158, 131.183, 141.044,
141.235, 134.580, 393.060, and 157.621 in Sections 1 to 12 of this Act is to affirm the amendments made to these sections in 2008 Ky. Acts ch. 132. The provisions in Sections 1 to 12 of this Act shall apply retroactively to April 24, 2008.”
Legislative Research Commission Note (3/24/2009). 2009 Ky. Acts ch. 86, sec. 18, provides “To the extent that any provision included in this Act is considered new language, the provisions of KRS § 446.145 requiring such new language to be underlined are notwithstood.”
136.390, shall charge and collect a surcharge of one dollar and eighty cents ($1.80) 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 KRS § 95A.262, and the Law Enforcement Foundation Program fund, KRS § 15.430.
Terms Used In Kentucky Statutes 136.392
- branch budget: means an enactment by the General Assembly which provides appropriations and establishes fiscal policies and conditions for the biennial financial plan for the judicial branch, the legislative branch, and the executive branch, which shall include a separate budget bill for the Transportation Cabinet. See Kentucky Statutes 446.010
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Domestic: when applied to a corporation, partnership, business trust, or limited liability company, means all those incorporated or formed by authority of this state. See Kentucky Statutes 446.010
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Foreign: when applied to a corporation, partnership, limited partnership, business trust, statutory trust, or limited liability company, includes all those incorporated or formed by authority of any other state. See Kentucky Statutes 446.010
- Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
- Month: means calendar month. See Kentucky Statutes 446.010
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Real property: includes all lands within this state and improvements thereon. See Kentucky Statutes 136.010
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Statute: A law passed by a legislature.
- Year: means calendar year. See Kentucky Statutes 446.010
(b) Effective July 1, 2019, the surcharge rate in paragraph (a) of this subsection shall only be adjusted by an Act of the General Assembly, and the adjusted rate shall be applied beginning ninety (90) days after the effective date of the Act.
(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 KRS § 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 KRS § 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 Kentucky Fire Commission, the Kentucky Law Enforcement Council, and the Department of 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.
(6) Pursuant to the Non-Admitted and Reinsurance Reform Act of 2010, Title V, Subtitle B, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, the insurance premium surcharge on non-admitted insurance
for multistate risks shall be exempt from the provisions of this section but shall be subject to the provisions of KRS § 304.10-180.
Effective: July 15, 2020
History: Amended 2020 Ky. Acts ch. 67, sec. 17, effective July 15, 2020. — Amended
2019 Ky. Acts ch. 140, sec. 1, effective June 27, 2019. — Amended 2012 Ky. Acts ch. 80, sec. 1, effective July 12, 2012. — Amended 2011 Ky. Acts ch. 48, sec. 3, effective June 8, 2011. — 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. – Amended 1992 Ky. Acts ch.
338, sec. 17, effective July 14, 1992; and ch. 381, sec. 1, effective July 14, 1992. — Amended 1990 Ky. Acts ch. 481, sec. 3, effective July 13, 1990. — Amended 1986
Ky. Acts ch. 425, sec. 1, effective July 15, 1986. — Amended 1984 Ky. Acts ch. 300, sec. 1, effective July 13, 1984; and ch. 332, sec. 16, effective July 13, 1984. — Created 1982 Ky. Acts ch. 246, sec. 1, effective April 1, 1982.
2022-2024 Budget Reference. See State/Executive Branch Budget, 2022 Ky. Acts ch.
199, Pt. V, B, 1 at 1757.
Legislative Research Commission Note (6/8/2011). A reference in subsection (6) of this statute to “Pub. L. No. 111-517,” the Non-Admitted and Reinsurance Reform Act of 2010, Title V, Subtitle B, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, has been changed in codification to “Pub. L. No. 111-203” to correct a manifest clerical or typographical error under the authority of KRS
7.136(1).
Legislative Research Commission Note (6/8/2011). 2011 Ky. Acts ch. 48, sec. 5, provided that the provisions contained in Sections 2, 3, and 4 of that Act “shall take effect as provided in Article XIII of Section 1 of this Act, upon legislative enactment of the compact into law by two compacting states, provided the commission shall become effective for purposes of adopting rules, and creating the clearinghouse when there are a total of ten compacting states and contracting states or, alternatively, when there are compacting states and contracting states representing greater than 40 percent of the surplus lines insurance premium volume based on records of the percentage of surplus lines insurance.” The Reviser of Statutes has determined that, as of April 8, 2011, two states had enacted the compact, thereby triggering the initial effective date of the compact. Since 2011 Ky. Acts ch. 48, did not contain an emergency clause, this section became effective June 8, 2011, the normal effective date for 2011 legislation.
Legislative Research Commission Note (3/24/2009). 2009 Ky. Acts ch. 86, sec. 17, provides that “The intent of the General Assembly in repealing and reenacting KRS
136.392, 138.195, 141.160, 160.6156, 160.6157, 160.6158, 131.183, 141.044,
141.235, 134.580, 393.060, and 157.621 in Sections 1 to 12 of this Act is to affirm the amendments made to these sections in 2008 Ky. Acts ch. 132. The provisions in Sections 1 to 12 of this Act shall apply retroactively to April 24, 2008.”
Legislative Research Commission Note (3/24/2009). 2009 Ky. Acts ch. 86, sec. 18, provides “To the extent that any provision included in this Act is considered new language, the provisions of KRS § 446.145 requiring such new language to be underlined are notwithstood.”