CHAPTER 229. COOPERATIVE AGREEMENTS WITH OTHER STATES
INSURANCE CODE
TITLE 3. DEPARTMENT FUNDS, FEES, AND TAXES
SUBTITLE B. INSURANCE PREMIUM TAXES
CHAPTER 229. COOPERATIVE AGREEMENTS WITH OTHER STATES
Sec. 229.001. DEFINITIONS. In this chapter:
(1) "Agent" includes:
(A) a surplus lines agent, as defined by Section 981.002;
(B) a person licensed as a surplus lines agent by another state;
and
(C) any other person who performs the acts of an agent, whether
through an oral, written, electronic, or other form of
communication, by soliciting, negotiating, procuring, or
collecting a premium on an insurance contract.
(2) "Insurer" has the meaning assigned by Section 101.002 and
includes:
(A) an insurer that does not hold a certificate of authority in
this state;
(B) an eligible surplus lines insurer; and
(C) an insurer that holds a certificate of authority in this
state but performs acts outside the scope of its authority under
the certificate.
(3) "Premium" includes:
(A) any consideration for insurance, including:
(i) a premium;
(ii) a membership fee;
(iii) an assessment; and
(iv) dues; or
(B) any other meaning of the term adopted in a cooperative
agreement.
(4) "Processing entity" means a processing center or
clearinghouse established under a cooperative agreement.
(5) "Stamping office" means the Surplus Lines Stamping Office of
Texas or similar stamping offices in other states.
Added by Acts 2007, 80th Leg., R.S., Ch.
932, Sec. 11, eff. June 15, 2007.
Renumbered from Insurance Code, Section 228.001 by Acts 2009,
81st Leg., R.S., Ch.
87, Sec. 27.001(60), eff. September 1, 2009.
Sec. 229.002. COOPERATIVE AGREEMENTS WITH OTHER STATES. (a)
The comptroller may enter into a cooperative agreement,
reciprocal agreement, or compact with another state for the
collection of insurance premium taxes imposed by Chapters 225 and
226 on a multistate basis. An agreement or amendment of an
agreement takes effect according to its terms, except that an
agreement or amendment may not take effect until the proposed
agreement or amendment is published in the Texas Register.
(b) An agreement may provide for:
(1) determining a base state and multistate allocation of
insurance premiums;
(2) tax reporting requirements;
(3) audit and refund claim procedures;
(4) exchange of information;
(5) requirements for reporting on a multistate basis;
(6) insurance and tax related terms and definitions;
(7) penalties, fees, administrative costs, and interest rates;
(8) audit assessment and refund claim limitation periods;
(9) procedures for collecting amounts due from agents,
insurers, or other persons and for collecting and forwarding the
amounts due to the jurisdiction to which the amount is owed;
(10) procedures for verifying refund claims by agents, insurers,
or other persons and for collecting those amounts from the
jurisdiction owing the refund amount;
(11) the temporary remittal of funds equal to the amounts due to
another jurisdiction, subject to appropriation of funds for that
purpose; and
(12) other provisions to facilitate the administration of the
agreement.
(c) The comptroller may, as required by the terms of an
agreement, provide to an officer of another state any information
that relates to the solicitation, negotiation, procurement,
placement, issuance, receipt, or collection of premiums by an
agent, insurer, or other person for an insurance contract or
policy that may be subject to the premium taxes imposed by
Chapter 225 or 226.
(d) An agreement may provide for each state to audit the records
of an agent, insurer, or other person based in this state to
determine if insurance premium taxes due each state that is a
party to the agreement are properly reported and paid. An
agreement may provide for each state to forward the findings of
an audit performed on an agent, insurer, or other person based in
this state to each other state in which the person has an
allocation of taxable premiums.
(e) For an agent, insurer, or other person who has an allocation
of taxable premiums in this state, the comptroller may use an
audit performed by another state that is a party to an agreement
with this state to make an assessment of insurance premium taxes
against the agent, insurer, or other person. An assessment made
by the comptroller under this subsection is prima facie evidence
that the amount shown as due is correct.
(f) An agreement entered into under this section does not affect
the comptroller's authority to audit any person under any other
law.
(g) An agreement entered into under this section prevails over
an inconsistent rule of the comptroller. Except as otherwise
provided by this section, a statute of this state prevails over
an inconsistent provision of an agreement entered into under this
section.
(h) The comptroller may segregate in a separate fund or account
the amount estimated to be due to other jurisdictions, amounts
subject to refund during the fiscal year, fees, and other costs
collected under the agreement. On a determination of an amount
held that is due to be remitted to another jurisdiction, the
comptroller may issue a warrant or make an electronic transfer of
the amount as necessary to carry out the purposes of the
agreement. An auditing cost, membership fee, or other cost
associated with the agreement may be paid from interest earned on
funds segregated under this subsection. Any interest earnings in
excess of the costs associated with the agreement shall be
credited to general revenue.
(i) The legislature finds that it is in the public interest to
enter into insurance tax and regulatory agreements with other
jurisdictions that may provide for the temporary remittal of
amounts due other jurisdictions that exceed the amounts collected
and for cooperation with other jurisdictions for the collection
of taxes imposed by this state under Chapters 225 and 226 and
similar taxes imposed under statutes of other jurisdictions on
insurance premiums. The comptroller shall ensure that reasonable
measures are developed to recover insurance taxes and other
amounts due this state during each biennium.
(j) The comptroller may enter into a cooperative agreement,
reciprocal agreement, or compact with another state to provide
for the collection of taxes imposed by this state and the other
states on insurances taxes that may be due the states and this
state based on a standardized premium allocation adopted by the
states under the agreement. The comptroller may also enter into
other cooperative agreements with surplus lines stamping offices
located in this state and other states in the reporting and
capturing of related tax information. In addition, the
comptroller may enter into cooperative agreements with processing
entities located in this state or other states related to the
capturing and processing of insurance premium and tax data.
(k) The comptroller may adopt rules as necessary to implement
this chapter. In adopting rules under this chapter, the
comptroller may not adopt a rule that does not specifically
implement this section.
Added by Acts 2007, 80th Leg., R.S., Ch.
932, Sec. 11, eff. June 15, 2007.
Renumbered from Insurance Code, Section 228.002 by Acts 2009,
81st Leg., R.S., Ch.
87, Sec. 27.001(60), eff. September 1, 2009.