Form 74a118a - Insurance Surcharge Report - 2012 Page 2
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2GENERAL INFORMATION
KRS 136.392 requires that every domestic, foreign and alien insurer, other than life and health insurers, which is subject to or exempted from
Kentucky insurance premiums taxes as levied pursuant to the provisions of either KRS 136.350, 136.370 or 136.390, shall charge and collect
a surcharge at the current rate upon each $100 of premium, assessments or other charges, except for whether the charges are designated as
premiums, assessments or otherwise.
The insurance 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 insurance coverage is collected. When claiming a deduction for premiums returned to a policyholder, the
surcharge must also be returned to the policyholder.
No insurer or its agent shall be entitled to any portion of any premium surcharge as a fee or commission for its collection.
On or before the 20th day of each month, each insurer shall report and remit to the Department of Revenue, on the required forms, all premium
surcharge monies collected during the preceding monthly accounting period less any monies returned to policyholders on policies terminated
by either the insured or the insurer. Insurers with an annual liability of less than $1,000 for each of the previous two calendar years may report
and remit to the Department of Revenue all premium surcharge monies collected on a calendar year basis on or before the 20th day of January
of the following year.
The penalty for failure to file an insurance premium surcharge report by the due date is 2 percent of the surcharge due for each 30 days
or fraction thereof that the report is late (maximum 20 percent). The minimum penalty is $10. (KRS 131.180 (1))
The penalty for failure to pay the insurance premium surcharge by the due date is 2 percent of the surcharge due for each 30 days or fraction
thereof that the payment is overdue (maximum 20 percent). The minimum penalty is $10. (KRS 131.180 (2))
Interest at the “tax increase rate” is applied to all insurance premium surcharge liabilities not paid by the original due date of the report. The
computation period is from the original due date of the report to the date of payment. (KRS 131.183 (1))
Report on line 1 only those premiums that have been collected.
Types of Insurance Premiums Exempt from the Insurance Premium Surcharge
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Premiums received for health and accident insurance
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Premiums received for reinsurance
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Premiums received for title insurance
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Premiums received for workers’ compensation insurance
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Premiums received by life and health insurers
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Premiums received for federal insured crop insurance
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Premiums received for federal insured flood insurance
Types of Policyholders Exempt from the Insurance Premium Surcharge
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Federal government
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Resident, nonprofit educational and charitable institutions which have qualified for exemption from income taxation under Section
501 (c) (3) of the Internal Revenue Code
Types of Policyholders Partially Exempt from the Insurance Premium Surcharge
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The Commonwealth of Kentucky or any of its agencies, and any city, county, political subdivision or local government body of the Com-
monwealth are only exempt from the surcharge on premiums collected for coverage of real property. Premiums for surety and liability
coverage are subject to the surcharge.
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Resident, nonprofit religious institutions are exempt from the surcharge on premiums collected for real, tangible and intangible property
coverage only. Premiums for surety, liability and other coverage are subject to the surcharge.
Premiums collected for surety and bonds on public works projects are subject to the surcharge if the contractor is the policyholder. The fact
that a governmental entity may be the obligee has no bearing on the application of the surcharge.
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Parent category: Financial