83-34-11 - Implementation of surcharge on all property and casualty premiums; exceptions; collection of surcharges; funds collected as surcharges to be used to reimburse assessable insurers for regula
§ 83-34-11. Implementation of surcharge on all property and casualty premiums; exceptions; collection of surcharges; funds collected as surcharges to be used to reimburse assessable insurers for regular assessments; reimbursement to be refunded to association under certain conditions; audit of insurers; quarterly reports.
(1) Within one hundred twenty (120) days of the levy of any regular assessments, the commissioner shall implement a surcharge on all property and casualty insurance premiums for insurance for property and activities in this state designed to recover to the association within one (1) year the amount of such regular assessment for reimbursement to assessable insurers who paid the regular assessment. "Premiums" includes premiums for policies issued by or for the association and by or for the Mississippi Residential Property Insurance Underwriting Association. "Premiums" shall not include premiums for workers' compensation coverage, premiums for medical malpractice liability coverage including medical malpractice liability coverage issued by companies created under Section 83-47-1 et seq., nor any premiums for coverage by insurance pools or plans administered by or through the State of Mississippi. Such surcharge shall be specifically identified on either the premium statements or the policy declarations pages or other appropriate policy forms as relating to the specific Mississippi Windstorm Underwriting Association regular assessment for which it was implemented. The commissioner shall name each such surcharge so that it can be uniformly identified by insurers and agents placing insurance through nonadmitted insurers.
(2) The surcharge shall be a percentage of the total policy premium, but the surcharge shall not be considered premium and is not subject to premium taxes or commissions. However, failure to pay the surcharge shall be treated the same as failure to pay premium. "Total policy premium" includes taxes and commissions.
(3) If at any time, the surcharge to repay regular assessments shall be insufficient, the commissioner shall increase the surcharge as necessary and appropriate. However, in no event may the aggregate total of all regular assessments in a year exceed the maximum amounts specified in Section 83-34-10.
(4) The commissioner shall cease regular assessment surcharges as he determines appropriate funds have been collected. However, the commissioner shall endeavor to apply surcharges on a one-year basis in order to promote consistency, nondiscrimination and fairness among policyholders purchasing or renewing insurance during that year. Any collections in excess of the amounts needed shall be assets of the association for investment and other uses.
(5) Each licensed insurer issuing insurance for property and casualty risks in the state and each agent placing insurance through nonadmitted insurers, shall collect the regular assessment surcharges established by the commissioner under the authority of this section. Funds collected by such insurers and agents as regular assessment surcharges shall be collected and held in trust and shall be fully remitted to the association on a quarterly basis with forms providing appropriate information as designed by the association. Insurers and agents shall remit such funds to the association within twenty (20) days after the end of each quarter. At such time the insurers and agents shall further remit to the association all interest earned on the surcharge funds. However, assessable insurers of the association who have paid to the association the regular assessment that is the basis of the surcharge shall not be required to remit interest earned on collected surcharges from the lines of business on which their regular assessment was based.
(6) The association shall reimburse assessable insurers for regular assessments from the funds collected as regular assessment surcharges. Reimbursements shall be made to assessable insurers in the same percentages as the regular assessments were paid by assessable insurers. The association must endeavor to make reimbursements from the surcharge funds collected within sixty (60) days of the end of each quarter. Any funds collected by the association in excess of the amount necessary to reimburse assessable insurers for regular assessments shall be general funds of the association.
(7) The reimbursement to assessable insurers for regular assessments as provided in subsection (6) must be refunded to the association by any insurer that reduces its property writings in the state by more than ten percent (10%) in the five-year period beginning January 1 of the year following the regular assessment, unless such insurer is granted an exception by the commissioner after public hearing on the request for exception. The reasons for an exception by the commissioner shall include, but are not limited to, inadequate solvency to continue writing at the previous level. Refunds shall be proportionate to the point in time during the five-year period the assessable insurer drops its property writings more than ten percent (10%). Prior to receiving any reimbursement by the association, each assessable insurer must execute an agreement provided by the association agreeing to comply with the intent of this subsection.
(8) The association and the commissioner are both specifically given the power to audit licensed insurers and agents placing insurance through nonadmitted insurers to confirm the accuracy of remittances of surcharges at the expense of the licensed insurers and agents.
(9) The association shall report quarterly to the commissioner providing all financial information for each regular assessment surcharge, including:
(a) The original amount of the regular assessment and the amount remaining not reimbursed to assessable insurers;
(b) Total surcharge funds recovered to date; and
(c) Any information requested by the commissioner.
Sources: Laws, 1987, ch. 459, § 7; Laws, 2007, ch. 425, § 12, eff from and after passage (approved Mar. 22, 2007.)