North Carolina ~ Insurance Tax: Conformity to Federal Nonadmitted and Reinsurance Reform Act Enacted

Legislation conforms North Carolina’s surplus lines insurance and gross premiums insurance tax laws to the federal Nonadmitted and Reinsurance Reform Act of 2010 (NRRA). Amendments specify that transactions of surplus lines insurance remain subject to the current surplus lines insurance tax rate only if North Carolina is the home state of the insured. However, North Carolina will retain insurance premiums associated with an insured located in other states to the extent that other states in which portions of the properties, risks, or exposures reside have failed to enter into a compact or reciprocal allocation procedure with North Carolina.

The North Carolina Revenue Laws Study Committee is required to work with the Commissioner of Insurance to study the potential impact that would result from North Carolina’s entrance into a nonadmitted insurance multistate agreement or other compact or interstate agreement for the purpose of carrying out the NRRA in order to prevent North Carolina from losing revenue after the NRRA’s July 21, 2011, effective date.

Ch. 120 (S.B. 321), Laws 2011, effective July 21, 2011

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Wolters Kluwer Tax and Accounting

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