The New York surplus lines tax is 3.6% of the gross premium (less any returned premium) on insurance placed with a non-admitted insurer when New York is the insured’s home state. On top of that, the Excess Line Association of New York (ELANY) charges a 0.15% stamping fee, bringing the total add-on to 3.75% of premium. When a licensed excess line broker places the coverage, the broker collects and remits the tax; when a New York insured buys directly from an unauthorized insurer without a broker, the insured pays the tax itself.
The Rate and the Stamping Fee
The 3.6% tax is calculated on gross premiums charged, minus any returned premiums, before other credits or adjustments.1New York State Senate. New York Insurance Law 2118 – Excess Line Brokers; Duties ELANY’s 0.15% stamping fee applies to each policy the association processes and records, and funds its regulatory oversight. Brokers collect both charges from the policyholder and hold the funds until they’re remitted.
The statutory basis is New York Insurance Law §2118, which sets out the excess line broker’s duties, including the obligation to pay premium tax to the superintendent of financial services.1New York State Senate. New York Insurance Law 2118 – Excess Line Brokers; Duties
Who Actually Pays the Tax
Two different situations, two different filers.
If a licensed excess line broker places the coverage, the broker is legally responsible for collecting the 3.6% and remitting it to the Department of Financial Services (DFS). The policyholder pays the broker; the broker pays the state.
If a New York insured buys coverage directly from an unauthorized insurer without going through a licensed excess line broker, the transaction is independently procured insurance, and the insured owes the tax directly. New York Tax Law §1551 imposes the same 3.6% rate on gross premiums less returns.2New York State Senate. New York Tax Law 1551 – Imposition of Tax The insured reports and pays to the Commissioner of Taxation and Finance within 60 days after the end of the calendar quarter in which the policy took effect.3Excess Line Association of New York. New York Excess and Surplus Lines Laws and Regulations ELANY publishes a Direct Procurement Tax Form (CT33D) for this purpose.4Excess Line Association of New York. Forms and Affidavits Businesses that buy coverage directly from a foreign insurer sometimes miss this obligation entirely because no broker is in the picture to handle it.
When New York Is the Taxing State
Federal law controls which state gets to tax a surplus lines placement. Under the Nonadmitted and Reinsurance Reform Act (NRRA), only the insured’s home state may impose premium tax on the transaction, and no other state can tax the same policy.5Office of the Law Revision Counsel. 15 U.S.C. Chapter 108 – State-Based Insurance Reform
For a business, the home state is the state of its principal place of business. For an individual, it’s the state of principal residence. If 100% of the insured risk is located outside that state, the home state shifts to whichever state has the greatest percentage of taxable premium allocated to it. For affiliated groups with multiple named insureds on one policy, the home state is set by the group member with the largest share of premium.6Office of the Law Revision Counsel. 15 U.S.C. 8206 – Definitions
When New York is the home state, the full 3.6% applies to the entire premium regardless of where the covered property or exposures sit in other states. The broker writes one check to New York. New York can still require a tax allocation report showing how premium is attributable across states; ELANY’s Tax Allocation Report (DFS Form EL-4) is the form used.4Excess Line Association of New York. Forms and Affidavits
The 45-Day ELANY Filing After Each Placement
Within 45 days of procuring a policy, the excess line broker must submit documentation to ELANY for recording and stamping. This per-transaction filing is separate from the annual tax return and can’t be deferred to year-end. Each placement requires three items: a Part A Affidavit by Excess Line Broker, a Notice of Excess Line Placement, and a copy of the policy’s declarations page or cover note.1New York State Senate. New York Insurance Law 2118 – Excess Line Brokers; Duties4Excess Line Association of New York. Forms and Affidavits
The declarations page or cover note must show the insured’s name and address, the gross premium, the name of the unauthorized insurer, and the type of insurance placed. A binder can be submitted temporarily if the declarations page isn’t yet available, but the actual declarations page must follow as soon as it arrives.1New York State Senate. New York Insurance Law 2118 – Excess Line Brokers; Duties Endorsements that don’t change the premium are exempt from stamping.
When a producing broker handled the market search rather than the excess line broker who filed, a Part C Affidavit by Producing Broker is also required.4Excess Line Association of New York. Forms and Affidavits
The Annual DFS Premium Tax Filing by March 15
The annual premium tax statement is due to DFS by March 15 covering all policies procured during the prior calendar year. If March 15 falls on a weekend or legal holiday, the deadline shifts to the next business day.7New York State Department of Financial Services. Excess Lines Broker Premium Tax Statement The filing includes the return in the form prescribed by the superintendent plus the 3.6% tax payment on the year’s gross premiums less returns.1New York State Senate. New York Insurance Law 2118 – Excess Line Brokers; Duties
Filing is electronic through the DFS Portal, not through ELANY. Every excess line broker needs a DFS ID account with multi-factor authentication to access the Excess Line Premium Tax Submission application.8New York State Department of Financial Services. Excess Lines Premium Tax Statement Filing
Corrections after submission are handled by a supplemental premium tax statement filed through the same portal. Supplementals cover corrections to the original, additional transactions, and claims for credits or refunds. The supplemental option only becomes available once the original has been submitted.8New York State Department of Financial Services. Excess Lines Premium Tax Statement Filing
The Diligent Search That Has to Come First
The tax and the filings only apply to a lawfully placed surplus lines policy, and a lawful placement requires a diligent search of the admitted market. New York requires documented declinations from at least three licensed insurers that the broker has reason to believe might consider writing the type of coverage involved.3Excess Line Association of New York. New York Excess and Surplus Lines Laws and Regulations The declinations must come from carriers that plausibly write similar risks.
Coverages on New York’s export list are exempt from the search. The superintendent of financial services maintains the list under 11 CRR-NY 27.3(g), which identifies lines of insurance generally unavailable from licensed carriers. If a policy bundles multiple coverages and only some are on the export list, the diligent search still has to be completed for the portions not listed.3Excess Line Association of New York. New York Excess and Surplus Lines Laws and Regulations The Part A Affidavit is where the broker attests either that the search was made or that the coverage qualifies under the export list.
Records to Keep
Excess line brokers must retain records of surplus lines transactions for at least three years, under Insurance Law §2119 and Regulation 29.9New York State Department of Financial Services. Record Retention in a Durable Medium by Insurance Agents and Brokers Files should include policy declarations, evidence of the diligent search, copies of affidavits filed with ELANY, and documentation of tax payments to DFS. ELANY keeps its own records of stamped documents, but that doesn’t relieve the broker of the retention duty. Three years is the floor; brokers handling claims-made policies or long-tail risks often hold records longer.