What is the additional tax applied to independent procured insurance?

What is the additional tax applied to independent procured insurance?

• A. 3%
• B. 5%
• C. 7%
• D. 10%

Answer: (B)

The additional tax applied to independent procured insurance in Louisiana is set at 5%. This tax is a unique requirement for surplus lines policies, which are purchased from non-admitted carriers. These carriers do not have the same regulatory approval as admitted carriers, and as such, the state imposes this additional tax to ensure that the state can regulate and raise revenue from these types of transactions. The 5% rate is significant because it reflects the state's method of balancing the need for regulatory oversight of non-admitted insurers while still allowing policyholders access to coverage that may not be available through admitted markets.

The additional tax applied to independent procured insurance in Louisiana is set at 5%. This tax is a unique requirement for surplus lines policies, which are purchased from non-admitted carriers. These carriers do not have the same regulatory approval as admitted carriers, and as such, the state imposes this additional tax to ensure that the state can regulate and raise revenue from these types of transactions. The 5% rate is significant because it reflects the state's method of balancing the need for regulatory oversight of non-admitted insurers while still allowing policyholders access to coverage that may not be available through admitted markets.