KRS 136.392 — Premium surcharge

(1) (a) Every domestic, foreign, or alien insurer, other than life and health insurers,
which is either subject to or exempted from Kentucky premium taxes as
levied pursuant to the provisions of either KRS 136.340, 136.350, 136.370, or
136.390, shall charge and co llect a surcharge of one dollar and eighty cents
($1.80) upon each one hundred dollars ($100) of premium, assessments, or
other charges, except for those municipal premium taxes, made by it for
insurance coverage provided to its policyholders, on risk loca ted in this state,
whether the charges are designated as premiums, assessments, or otherwise.
The premium surcharge shall be collected by the insurer from its
policyholders at the same time and in the same manner that its premium or
other charge for the in surance coverage is collected. The premium surcharge
shall be disclosed to policyholders pursuant to administrative regulations
promulgated by the commissioner of insurance. However, no insurer or its
agent shall be entitled to any portion of any premium s urcharge as a fee or
commission for its collection. On or before the twentieth day of each month,
each insurer shall report and remit to the Department of Revenue, on forms as
it may require, all premium surcharge moneys collected by it during its
preceding monthly accounting period less any moneys returned to
policyholders as applicable to the unearned portion of the premium on
policies terminated by either the insured or the insurer. Insurers with an
annual liability of less than one thousand dollars ($1, 000) for each of the
previous two (2) calendar years may report and remit to the Department of
Revenue all premium surcharge moneys collected on a calendar year basis on
or before the twentieth day of January of the following calendar year. The
funds deriv ed from the premium surcharge shall be deposited in the State
Treasury, and shall constitute a fund allocated for the uses and purposes of the
Firefighters Foundation Program fund, KRS 95A.220 and 95A.262, and the
Law Enforcement Foundation Program fund, KRS 15.430.
(b) Effective July 1, 2019, the surcharge rate in paragraph (a) of this subsection
shall only be adjusted by an Act of the General Assembly, and the adjusted
rate shall be applied beginning ninety (90) days after the effective date of the
Act.
(2) Within five (5) days after the end of each month, all insurance premium surcharge
proceeds deposited in the State Treasury as set forth in this section shall be paid by
the State Treasurer into the Firefighters Foundation Program fund trust and agency
account and the Law Enforcement Foundation Program fund trust and agency
account. The amount paid into each account shall be proportionate to each fund's
respective share of the total deposits, pursuant to KRS 42.190. Moneys deposited to
the Law Enforcement Foundation Program fund trust and agency account shall not
be disbursed, expended, encumbered, or transferred by any state official for uses
and purposes other than those prescribed by KRS 15.410 to 15.500, except that
beginning with fiscal year 1994 -95, through June 30, 1999, moneys remaining in
the account at the end of the fiscal year in excess of three million dollars
($3,000,000) shall lapse. On and after July 1, 1999, moneys in this account shall not
lapse. Money deposited to the Firefighters Foundat ion Program fund trust and
agency account shall not be disbursed, expended, encumbered, or transferred by any
state official for uses and purposes other than those prescribed by KRS 95A.200 to
95A.300, except that beginning with fiscal year 1994 -95, throug h June 30, 1999,
moneys remaining in the account at the end of the fiscal year in excess of three
million dollars ($3,000,000) shall lapse, but moneys in the revolving loan fund
established in KRS 95A.262 shall not lapse. On and after July 1, 1999, moneys in
this account shall not lapse.
(3) Insurance premium surcharge funds collected from the policyholders of any
domestic mutual company, cooperative, or assessment fire insurance company shall
be deposited in the State Treasury, and shall be paid monthly by the State Treasurer
into the Firefighters Foundation Program fund trust and agency account as provided
in KRS 95A.220 to 95A.262. However, insurance premium surcharge funds
collected from policyholders of any mutual company, cooperative, or assessment
fire insurance company which transfers its corporate domicile to this state from
another state after July 15, 1994, shall continue to be paid into the Firefighters
Foundation Program fund and the Law Enforcement Foundation Program fund as
prescribed.
(4) No l ater than July 1 of each year, the Department of Insurance shall provide the
Department of Revenue with a list of all Kentucky -licensed property and casualty
insurers and the amount of premium volume collected by the insurer for the
preceding calendar year as set forth on the annual statement of the insurer. No later
than September 1 of each year, the Department of Revenue shall calculate an
estimate of the premium surcharge due from each insurer subject to the insurance
premium surcharge imposed pursuant t o this section, based upon the surcharge rate
imposed pursuant to this section and the amount of the premium volume for each
insurer as reported by the Department of Insurance. The Department of Revenue
shall compare the results of this estimate with the p remium surcharge paid by each
insurer during the preceding year and shall provide the Legislative Research
Commission, the Kentucky Fire Commission, the Kentucky Law Enforcement
Council, and the Department of Insurance with a report detailing its findings on a
cumulative basis. In accordance with KRS 131.190, the Department of Revenue
shall not identify or divulge the confidential tax information of any individual
insurer in this report.
(5) The insurance premiums surcharge provided in this section shall no t apply to
premiums collected from the following:
(a) The federal government;
(b) Resident educational and charitable institutions qualifying under Section
501(c)(3) of the Internal Revenue Code;
(c) Resident nonprofit religious institutions for real, tangible, and intangible
property coverage only;
(d) State government for coverage of real property; or
(e) Local governments for coverage of real property.
(6) Pursuant to the Non -Admitted and Reinsuranc e Reform Act of 2010, Title V,
Subtitle B, of the Dodd -Frank Wall Street Reform and Consumer Protection Act,
Pub. L. No. 111 -203, the insurance premium surcharge on non -admitted insurance
for multistate risks shall be exempt from the provisions of this sec tion but shall be
subject to the provisions of KRS 304.10-180.