The Surplus Line Association of Oregon is responsible for reviewing Oregon surplus line placements and assisting the State of Oregon in collecting premium and fire marshal taxes on Oregon surplus line placements. Surplus line policies must be filed with the Surplus Line Association on the forms provided by the Association. These forms permit review of the basic requirements and the calculation of the taxes for each placement. In order to file a policy with the Association, prospective filers must register with the Association. The form for registering with the Association to permit filing of policies is available under the tab "Register with SLAOR" above.
Using web-assisted forms, registered filers prepare and submit electronic records and support documentation to the SLAOR office for review. Filers are billed quarterly by the SLAOR for the taxes to be paid the State of Oregon and for the SLSC (Surplus Line Service Charge). Each filer receives specific instructions on how to file when they register with SLAOR. A tax calculator tool is available on this website to enable all interested parties to calculate taxes that would apply to an Oregon surplus line transaction. See the "Taxes and Charges Calculator" option on the pane to the left of this page. (The tax calculator is a tool only - it is not a filing mechanism.)
Surplus lines policies are subject to three charges, which are paid quarterly:
1. State of Oregon Premium Tax: 2% of premium and fees/charges.
2. State of Oregon Fire Marshal Tax: 0.3% of premium and fees/charges. 3. The Surplus Line Service Charge (SLSC) is a one-time, fully-earned service charge due the Surplus Line Association, and is billed with the initial policy premium (or the annual premium billing for multi-year policies). The rate is a flat $15.00 for all policies with inception dates of 6/1/09 or later; there is no additional or return service charge for subsequent endorsements on those policies during the term of the policies. (The only exception is that a full return of the charge will be allowed in the event of a "flat" cancellation). All policies with inception dates prior to 6/1/09 will be processed under the previous service charge program; additional and/or return service charges will be incurred on all endorsements to such policies through the life of each policy, regardless of the effective date of those endorsements.
What taxes/charges are due on filings of surplus line policies in Oregon?
There are three components of mandatory taxes/charges on Oregon policies: State Premium Tax, State Fre Marshal Tax and Surplus Line Service Charge (SLSC - due the Surplus Line Association). They are:
1. State Premium Tax: 2% of the premium and all policy fees/charges. Surplus Line Service Charge (SLSC) is not subject to the State Premium Tax.
2. State Fire Marshal Tax: 0.3% of the premium and all policy fees/charges. Surplus Line Service Charge (SLSC) is not subject to the Fire Marshal Tax. 3. The Surplus Line Service Charge (SLSC) is a one-time, fully-earned service charge due the Surplus Line Association, and is billed with the initial policy premium (or the annual premium billing for multi-year policies). The rate is a flat $15.00 for all policies with inception dates of 6/1/09 or later; there is no additional or return service charge for subsequent endorsements on those policies during the term of the policies. (The only exception is that a full return of the charge will be allowed in the event of a "flat" cancellation). All policies with inception dates prior to 6/1/09 will be processed under the previous service charge program; additional and/or return service charges will be incurred on all endorsements to such policies through the life of each policy, regardless of the effective date of those endorsements. The surplus line producer is responsible for collecting these taxes and other charges and remitting them appropriately.
The SLAOR web filing system provided to registered filers (SLAFiler) automatically calculates the taxes. The user simply enters the coverage type and premium amount, and taxes and SLSC are automatically calculated. It is suggested that users utilize the "Taxes & Charges Calculator" available on this web site (see pane at left) when quoting surplus line business to avoid errors in calculating the taxes and SLSC.
Related fees and charges made by the Oregon surplus line licensee or any other entity (such as by an intermediary or by the insurer) are subject to the state premium tax and the fire marshal tax. How is the tax calculated on terrorism coverage?
If the terrorism peril is included in a policy with no separate premium charge, the premium will be reported and taxed under the classifications applying to perils for which there are premium allocations on the policy. If a separate premium allocation is made for the peril terrorism in the policy, the allocation shall be:
1. For third party policies, the terrorism premium should be reported with the coverage type applying to the other liability coverages on the policy. If it is a stand-alone terrorism liability policy (no other coverage on the policy), it should be reported as a liability coverage.
2. For any first party property coverage or package policies where there is a separate charge for the terrorism peril, it should be proportionately allocated to the coverage types where terrorism protection is provided. For example, the terrorism premium on a package policy with liability, inland marine and fire coverage would be allocated proportionately to the liability, inland marine and fire coverages if the terrorism coverage applied to all three. If the terrorism coverage applied only to the inland marine and fire exposures but not the liability exposure, its premium would be allocated proportionately between the inland marine and fire coverages. If the coverages on a policy are reported as multi-peril coverages, the terrorism coverage, too, would be reported as multi-peril. If the first party terrorism coverage is on a stand-alone basis (no other perils insured on the policy) the premium shall be reported under the peril "fire". Are fees legal in Oregon on surplus line business?
Fees charged by surplus line insurance companies or intermediaries other than an Oregon licensed surplus lines producer are unregulated and may be charged. They are taxed as premiums, subject to both a premium and fire marshal tax. (For information on fire marshal tax on fees/charges, see "How do I calculate the fire marshal tax?" above). Oregon licensed surplus line producers may also charge reasonable fees associated with the transaction subject to the provisions of ORS 735.455. The principal requirements are that a written agreement stipulating the fee must be in place between the surplus line licensee and the insurance producer prior to the binding or issuance of the insurance. Similarly, the producing insurance producer must have an agreement in place with insured prior to the binding or issuance of insurance if he wishes to pass the charge on to the insured. Such charges are also considered premiums and are subject to taxation but not fire marshal tax. All fees and charges must be shown on the policy declaration page submitted to the Surplus Line Association of Oregon.
From this page, any organization or individual desiring to file the premium on any surplus line insurance policy for which Oregon is the "home state" may access the form to apply for filing registration with the Surplus Line Association of Oregon. Before completing the application form, make sure that you fall in either Category 1 or Category 2 as follows:
Category 1: You, or the organization you represent, have secured an Oregon surplus line producer's license from the State of Oregon Insurance Division, and desire to be registered with the Surplus Line Association of Oregon so that you may make the filings required by Oregon statute on exposures for which you arrange surplus line insurance and for which Oregon is the "home state". Note: if both you (as an individual) AND the organization you represent are licensed, only one need be registered as a filer. In most cases, it would be appropriate to register the organization, assuming that you as the individual licensee will be transacting all of your business under the organization's name and do not wish to incur personality liability for the filing. or
Category 2: You (an insured, consultant, or producer licensed in a foreign country), or the organization you represent, are not licensed as an Oregon surplus line producer and no licensed intermediary was involved in the placement of your surplus line insurance policy (for which Oregon is the "home state"). You desire to report and pay the Oregon taxes on your surplus line insurance policy. You wish to be registered with the Association to make the filings. An SLAOR Filing Registration application form is available below. Print the form, complete manually, and submit it to the Surplus Line Association of Oregon.
Filing Registration Application