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ENGROSSED HOUSE
BILL NO. 3048 By: Tedford of the House
and
Reinhardt of the Senate
An Act relating to insurance; amending 36 O.S. 2021,
Section 1100.1, which relates to definitions used in
the Unauthorized Insurers and Surplus Lines Insurance
Act; modifying definitions; defining terms; amending
36 O.S. 2021, Section 1101, which relates to
representation of unauthorized insurers prohibition;
expanding statute to include nonadmitted insurers
selling nonadmitted insurance coverage; amending 36
O.S. 2021, Section 1101.1, which relates to domestic
surplus line insurers; removing licensee; amending 36
O.S. 2021, Section 1103, which relates to service of
process on a surplus lines insurer; establishing that
nonadmitted insurers assuming insurance in this state
are subject to this act; permitting suits against
nonadmitted insurer; amending 36 O.S. 2021, Section
1106, which relates to surplus lines and brokers;
permitting purchase of insurance from eligible
surplus lines insurers; directing for surplus lines
insurance to be procured through a licensed surplus
lines broker in insured's home state; amending 36
O.S. 2021, Section 1107, as amended by Section 4,
Chapter 195, O.S.L. 2024 (36 O.S. Supp. 2025, Section
1107), which relates to multistate risk, required
application and informational filings, and fee
payments; modifying statute to apply to only surplus
lines brokers and not licensees; amending 36 O.S.
2021, Section 1108, which relates to recognized
surplus lines; requiring surplus lines broker to
provide insured the policy or other evidence of
insurance within thirty days; providing required
content of certificates and policies; allowing the
Insurance Commissioner rulemaking authority; amending
36 O.S. 2021, Section 1109, which relates to validity
of surplus line insurance and notice of limitations
of coverage; requiring notice on declaration page of
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the policy; amending 36 O.S. 2021, Section 1111,
which relates to acceptance of surplus line business
by brokers; clarifying that only a surplus lines
broker and not a licensee may accept and place
surplus lines insurance; extending section to include
producers and agents; amending 36 O.S. 2021, Section
1112, which relates to solvent insurer required,
license revocation, and penalties; modifying language
for clarity; amending 36 O.S. 2021, Section 1113,
which relates to records of surplus lines licensees
or brokers; removing applicability to licensees;
modifying time frame for record keeping from three to
five years after contract effective date; amending 36
O.S. 2021, Section 1114, as amended by Section 5,
Chapter 195, O.S.L. 2024 (36 O.S. Supp. 2025, Section
1114), which relates to broker's annual statement;
adding clarifying language; amending 36 O.S. 2021,
Section 1115, which relates to tax on surplus lines;
removing premium tax for premiums charged for
independently procured insurance; amending 36 O.S.
2021, Section 1116, which relates to penalty for
failure to remit tax; extending applicability of
section to rules; requiring notice and opportunity
for hearing; allowing additional applicable
penalties; amending 36 O.S. 2021, Section 1118, which
relates to legal process against surplus lines
insurer; removing licensees; amending 36 O.S. 2021,
Section 1120, which relates to records of insureds;
clarifying section applies to producer or surplus
line broker; repealing 36 O.S. 2021, Section 1106.2,
which relates to exemption from due diligence search
and flood insurance; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 1100.1, is
amended to read as follows:
Section 1100.1. As used in the Unauthorized Insurers and
Surplus Lines Insurance Act:
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1. "Admitted insurer" means, with respect to a state, an
insurer that is licensed to transact the business of insurance in
such state;
2. "Affiliate" means, with respect to an insured, any business
entity that controls, is controlled by, or is under common control
with the insured;
3. "Affiliated group" means any group of entities that are all
affiliated;
4. "Business entity" means a corporation, association,
partnership, limited liability company, limited partnership, or
other legal entity;
5. "Control" means, with respect to an insured:
a. a person who, either directly or indirectly, or acting
through one or more other persons, owns, controls, or
has the power to vote twenty-five percent (25%) or
more of any class of voting securities of the business
entity, or
b. an entity controls in any manner the election of a
majority of the directors or trustees of the business
entity;
6. "Eligible surplus lines insurer" means a nonadmitted insurer
with which a surplus lines broker may place surplus lines insurance
pursuant to Section 1106 of this title;
7. "Home state" means:
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a. except as provided in subparagraphs b through e of
this paragraph, with respect to an insured:
(1) the state in which an insured maintains its
principal place of business or, in the case of an
individual, the individual's principal residence,
or
(2) if one hundred percent (100%) of the insured risk
is located out of the state referred to in
division (1) of this subparagraph, the state to
which the greatest percentage of the insured's
taxable premium for the insurance contract is
allocated,
b. with respect to determining the home state of the
insured, "principal place of business" means:
(1) the state where the insured maintains its
headquarters and where the insured's high-level
officers direct, control and coordinate the
business activities, or
(2) if the insured maintains its headquarters or the
insured's high-level officers direct, control and
coordinate the business activities outside
Oklahoma, the state to which the greatest
percentage of the insured's taxable premium for
that insurance contract is allocated,
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c. with respect to determining the home state of the
insured, "principal residence" means:
(1) the state where the insured resides for the
greatest number of days during the calendar year,
or
(2) if the insured's principal residence is located
outside any state, the state to which the
greatest percentage of the insured's taxable
premium for that insurance is allocated,
d. if more than one insured from an affiliated group are
named insureds on a single nonadmitted insurance
contract, the term "home state" means the home state,
as determined pursuant to division (1) of subparagraph
a of this paragraph, of the member affiliated group
that has the largest percentage of premium attributed
to it under such insurance contract, or
e. when the group policyholder pays one hundred percent
(100%) of the premium from its own funds, the term
"home state" means the home state, as determined
pursuant to division (1) of subparagraph a of this
paragraph, of the group policyholder. When the group
policyholder does not pay one hundred percent (100%)
of the premium from its own funds, the term "home
state" means the home state, as determined pursuant to
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division (1) of subparagraph a of this paragraph, or
of the group member;
3. 8. "Independently procured insurance" means insurance
procured by an insured directly from a nonadmitted insurer an
eligible surplus lines insurer;
4. 9. "Licensed" means, with respect to an insurer,
authorization to transact the business of insurance in a state by a
license, certificate of authority, charter or otherwise;
5. 10. "Multistate risk" means a risk covered by a nonadmitted
insurer with insured exposures in more than one state;
6. 11. "Nonadmitted insurance" means any property and casualty
insurance permitted in a state to be placed directly through a
surplus lines licensee or broker with a nonadmitted insurer eligible
to accept such insurance. For purposes of the Unauthorized Insurers
and Surplus Lines Insurance Act, nonadmitted insurance includes
independently procured insurance and surplus lines insurance;
7. 12. "Nonadmitted insurer" means, with respect to a state, an
insurer not licensed to engage in the business of insurance in such
state, but shall not include a risk retention group as that term is
defined under applicable federal law;
13. "Person" means an individual or a business entity;
8. 14. "Single-state risk" means a risk insured with insured
exposures in only one state;
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9. 15. "Surplus lines insurance" means insurance procured by a
nonadmitted licensee or broker from a surplus lines insurer as
permitted under the law of the insured's home state any insurance
permitted to be placed through a surplus lines broker with an
eligible surplus lines insurer, pursuant to Section 1106 of this
title; and
10. "Surplus lines licensee" or "surplus lines broker"
16. "Surplus lines broker" means an individual, firm or
corporation business entity that is licensed in the insured's home
under the laws of this state to sell, solicit, or negotiate, or
procure surplus lines insurance, including the agent of record on a
nonadmitted insurance policy, on properties, risks or exposures
located or to be performed in a this state allowing nonadmitted
insurers to do business.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 1101, is
amended to read as follows:
Section 1101. A. No person in Oklahoma shall in any manner:
1. Represent or assist any nonadmitted insurer in the selling,
soliciting, procuring, placing, or maintenance of any nonadmitted
insurance coverage upon or with relation to any subject of insurance
resident, located, or to be performed in Oklahoma without being a
licensed surplus lines licensee or broker as defined in the
Unauthorized Insurers and Surplus Lines Insurance Act; or
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2. Inspect or examine any risk or collect or receive any
premium on behalf of any nonadmitted insurer without being a
licensed surplus lines broker or licensee as defined in the
Unauthorized Insurers and Surplus Lines Insurance Act.
B. Any person transacting insurance or acting as a surplus
lines broker or licensee in violation of this section shall be
liable to the insured for the performance of any contract between
the insured and the insurer resulting from the transaction.
C. This section shall not apply as to reinsurance, to surplus
line lines insurance lawfully procured pursuant to the Unauthorized
Insurers and Surplus Lines Insurance Act, to transactions exempt
under Section 606 of this title (Authorization of Insurers and
General Qualifications), or to professional services of an adjuster
or attorney-at-law from time to time with respect to claims under
policies lawfully solicited, issued, and delivered outside of
Oklahoma.
D. The investigation and adjustment of any claim in this state
arising under an insurance contract issued by a nonadmitted insurer
shall not be deemed to constitute the transacting of the business of
insurance in this state.
E. Nonadmitted insurers shall contract with the trustees of any
fund which will insure residents in this state in a manner
consistent with the requirements, nature and scope of the
Unauthorized Insurers and Surplus Lines Insurance Act.
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SECTION 3. AMENDATORY 36 O.S. 2021, Section 1101.1, is
amended to read as follows:
Section 1101.1. A. An Oklahoma domestic insurer possessing
policyholder surplus of at least Fifteen Million Dollars
($15,000,000.00) may, pursuant to a resolution by its board of
directors, and with the written approval of the Insurance
Commissioner, be designated as a domestic surplus line lines
insurer. Such insurers may write surplus line lines insurance in
this state and in any other jurisdiction allowed under the
Nonadmitted and Reinsurance Reform Act of 2010.
B. The premiums of a domestic surplus line lines insurer shall
be subject to surplus line lines premium tax pursuant to Section
1115 of this title. The surplus lines broker or licensee shall pay
all premium taxes to the Insurance Commissioner when Oklahoma is the
home state of the insured until and unless in the exercise of his or
her sole discretion and judgment, the Insurance Commissioner decides
to join the Nonadmitted Insurance Multi-State Agreement or any other
multistate agreement or compact with the same function and purpose.
C. A domestic surplus line lines insurer may not issue a policy
designed to satisfy the motor vehicle financial responsibility
requirement of this state, the Workers' Compensation Code, or any
other law mandating insurance coverage by a licensed insurance
company.
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D. A domestic surplus line lines insurer is not subject to the
provisions of the Oklahoma Property & and Casualty Insurance
Guaranty Association Act nor the Oklahoma Life and Health Insurance
Guaranty Association Act.
SECTION 4. AMENDATORY 36 O.S. 2021, Section 1103, is
amended to read as follows:
Section 1103. A. Delivery, effectuation, or solicitation of
any insurance contract, by mail or otherwise, within this state by a
surplus lines insurer, or the performance within this state of any
other service or transaction connected with the insurance by or on
behalf of the insurer, shall be deemed to constitute an appointment
by the insurer of the Insurance Commissioner as its attorney, upon
whom may be served all lawful process issued within this state in
any action or proceeding against the insurer arising out of any such
contract or transaction.
B. Service of process shall be made by delivering to and
leaving with the Insurance Commissioner three copies thereof. At
time of service the plaintiff shall pay Twenty Dollars ($20.00) to
the Insurance Commissioner, taxable as costs in the action. The
Insurance Commissioner shall mail by registered mail one of the
copies of the process to the defendant at any home state address as
last known to the Insurance Commissioner, and shall keep a record of
all process so served.
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C. Service of process in any action or proceeding, in addition
to the manner provided herein, shall also be valid if served upon
any person within this state who, in this state on behalf of the
insurer, is soliciting insurance, or making, issuing, or delivering
any insurance policy, or collecting or receiving any premium,
membership fee, assessment, or other consideration for insurance.
D. Service of process upon an insurer in accordance with this
section shall be as valid and effective as if served upon a
defendant personally present in this state.
E. Means provided in this section for service of process upon
the insurer shall not be deemed to prevent service of process upon
the insurer by any other lawful means.
F. An insurer which has been so served with process shall have
the right to appear in and defend the action and employ attorneys
and other persons in this state to assist in its defense or
settlement.
G. Each nonadmitted insurer assuming insurance in this state,
or relative to property, risks, or exposures located or to be
performed in this state, shall be deemed to have subjected itself to
this act.
H. Notwithstanding conditions or stipulations in the policy or
contract, a nonadmitted insurer may be sued upon any cause of action
arising in this state, or relative to property, risks, or exposures
located or to be performed in this state, under any insurance
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contract made by it.
SECTION 5. AMENDATORY 36 O.S. 2021, Section 1106, is
amended to read as follows:
Section 1106. If insurance required to protect the interest of
the insured for the amount of insurance, coverage terms and solvency
requirements of the insured cannot be procured from admitted
insurers after inquiry in the market available to the insurance
producer, then insurance may be procured from eligible surplus lines
insurers subject to the following conditions:
1. The surplus lines insurer shall meet the requirements of the
Unauthorized Insurers and Surplus Lines Insurance Act and the
following conditions:
a. the insurer has capital and surplus or its equivalent
under the laws of its domiciliary jurisdiction which
equals the greater of:
(1) the minimum capital and surplus requirements
under the laws of this state for nonadmitted
insurers, or
(2) Fifteen Million Dollars ($15,000,000.00),
b. the requirements of subparagraph a of this paragraph
may be satisfied by an insurer's possessing less than
the minimum capital and surplus upon an affirmative
finding of acceptability by the Insurance
Commissioner. The finding shall be based upon such
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factors as quality of management, capital and surplus
of any parent company, company underwriting profit and
investment income trends, market availability and
company record and reputation within the industry. In
no event shall the Insurance Commissioner make an
affirmative finding of acceptability when the
nonadmitted insurer's capital and surplus is less than
Four Million Five Hundred Thousand Dollars
($4,500,000.00), and
c. the insurer, if an alien insurer, is listed on the
National Association of Insurance Commissioners
Nonadmitted Insurers Quarterly Listing; and
2. The If a broker is involved in the transaction in any way,
the surplus lines insurance shall be procured through a licensed
surplus lines licensee or broker licensed in the insurer's insured's
home state. An Oklahoma surplus lines license is required only
where Oklahoma is the home state of the insured.; and
3. For the purposes of carrying out the provisions of the
Nonadmitted and Reinsurance Reform Act of 2010, the Insurance
Commissioner is authorized to utilize the national insurance
producer database of the National Association of Insurance
Commissioners, or any other equivalent uniform national database,
for the licensure of an individual or entity as a surplus lines
licensee or broker and for renewal of such license.
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SECTION 6. AMENDATORY 36 O.S. 2021, Section 1107, as
amended by Section 4, Chapter 195, O.S.L. 2024 (36 O.S. Supp. 2025,
Section 1107), is amended to read as follows:
Section 1107. A. After procuring any surplus line insurance
where Oklahoma is the home state and the insurance involves a
multistate risk, the surplus lines licensee and broker shall submit
such information relating to the transaction as may be established
by the Insurance Commissioner. The data shall be provided to the
Insurance Commissioner until and unless in the exercise of his or
her sole discretion and judgment, the Insurance Commissioner decides
to enter or join the Nonadmitted Insurance Multi-State Agreement or
any other multistate agreement or compact with the same function and
purpose and other reporting requirements are thereby established.
B. When Oklahoma is the home state of the insured, the surplus
lines licensee or broker shall make all informational and tax
filings and fee and tax payments electronically in the manner and
form required or to be established by the Insurance Commissioner,
along with any applicable transaction fees. When Oklahoma is the
home state of the insured, the premium tax filings and premium tax
payments shall be provided entirely to the Insurance Commissioner
until and unless, in the exercise of his or her sole discretion and
judgment, the Insurance Commissioner decides to enter or join the
Nonadmitted Insurance Multi-State Agreement or any other multistate
agreement or compact with the same function and purpose.
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C. Failure to file the required information, any required fee
payments and make the required premium tax payments in the manner
established by the Insurance Commissioner pursuant to this section
and Section 1115 of this title where Oklahoma is the home state of
the insured shall result, after notice and opportunity for a
hearing, in censure, suspension, or revocation of license or a fine
of up to Five Hundred Dollars ($500.00) for each occurrence or by
both such fine and licensure penalty.
SECTION 7. AMENDATORY 36 O.S. 2021, Section 1108, is
amended to read as follows:
Section 1108. A. If a particular insurance coverage or type,
class, or kind of coverage is not readily procurable from authorized
insurers in Oklahoma, a surplus lines licensee or broker may place
the coverage with a nonadmitted insurer or surplus lines insurer as
defined in the Unauthorized Insurers and Surplus Lines Insurance
Act.
B. Upon placing surplus lines insurance, the surplus lines
broker shall, within thirty (30) days, deliver to the insured the
policy or, if the policy is not then available, a certificate, cover
note, binder, or other evidence of insurance. Each certificate or
policy of insurance shall contain or have attached a complete record
of all policy insuring agreements, conditions, exclusions, clauses,
endorsements, or other material facts that would regularly be
included in the policy.
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C. The Insurance Commissioner may, in accordance with Section
307.1 of this title, promulgate reasonable rules as are necessary or
proper to carry out the purposes of this act.
SECTION 8. AMENDATORY 36 O.S. 2021, Section 1109, is
amended to read as follows:
Section 1109. A. Insurance contracts procured as surplus line
coverage from surplus lines insurers in accordance with this article
shall be fully valid and enforceable as to all parties, and shall be
given recognition in all matters and respects to the same effect as
like contracts issued by admitted insurers.
B. Insurance contracts procured as surplus line coverage shall
contain in fourteen-point, all capital letter, bold-face type
notification stamped by the surplus lines licensee or broker or
surplus lines insurer on the declaration page of the policy that the
contracts are not subject to the protection of any guaranty
association in the event of liquidation or receivership of the
surplus lines insurer. the following: "NOTICE: A NONADMITTED OR
SURPLUS LINES INSURER IS ISSUING THE INSURANCE POLICY THAT YOU HAVE
APPLIED TO PURCHASE. THESE INSURERS DO NOT PARTICIPATE IN THE INSURANCE
GUARANTY FUNDS CREATED BY STATE LAW. THE GUARANTY FUNDS WILL NOT PAY YOUR
CLAIMS OR PROTECT YOUR ASSETS IF THE INSURER BECOMES INSOLVENT AND IS
UNABLE TO MAKE PAYMENTS AS PROMISED." The Commissioner is hereby
authorized to promulgate rules to establish further disclosure
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requirements for the purpose of protecting consumers of surplus line
coverage.
SECTION 9. AMENDATORY 36 O.S. 2021, Section 1111, is
amended to read as follows:
Section 1111. A surplus lines licensee or broker may accept and
place surplus lines insurance from any insurance producer or agent
or broker licensed in this state for the kind of insurance involved,
and may compensate such insurance producer or agent or broker
therefor. The insurance producer or agent or broker shall have the
right to receive from the surplus lines insurer the customary
commission.
SECTION 10. AMENDATORY 36 O.S. 2021, Section 1112, is
amended to read as follows:
Section 1112. A. A surplus lines licensee or broker shall not
knowingly place any such coverage with a nonadmitted insurer which
is in an unsound financial condition. To be considered financially
sound, a surplus lines insurer shall meet the requirements of
Section 1106 of this title.
B. For violation of this section, in addition to any other
penalty provided by law, the surplus lines broker's license shall be
revoked, and the broker shall not again be so licensed within a
period of two (2) years thereafter. In addition, any surplus lines
licensee and broker who violates this section shall be guilty of a
misdemeanor and upon conviction thereof shall be punished for each
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offense, by a fine of not more than One Thousand Dollars ($1,000.00)
or by confinement in jail for not more than ninety (90) days, or by
both such fine and imprisonment.
SECTION 11. AMENDATORY 36 O.S. 2021, Section 1113, is
amended to read as follows:
Section 1113. Each surplus lines licensee or broker licensed in
Oklahoma shall keep a full and true record of each surplus lines
contract procured by the surplus lines broker, and such record may
be examined at any time within three (3) five (5) years thereafter
after termination of the contract by the Insurance Commissioner.
The record shall include such information required to be submitted
as established by the Insurance Commissioner in this article.
SECTION 12. AMENDATORY 36 O.S. 2021, Section 1114, as
amended by Section 5, Chapter 195, O.S.L. 2024 (36 O.S. Supp. 2025,
Section 1114), is amended to read as follows:
Section 1114. Each surplus lines licensee or broker licensed or
transacting business in Oklahoma shall on or before April 1 of each
year file electronically, along with any applicable transaction
fees, with the Insurance Commissioner a verified statement of all
surplus lines insurance transacted by the surplus lines broker
during the preceding calendar year where Oklahoma is the home state
of the insured. The statement shall be on a form prescribed and
furnished by the Insurance Commissioner and shall show such
information required to be submitted as established by the Insurance
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Commissioner. The information shall be provided to the Insurance
Commissioner until and unless, in the exercise of his or her sole
discretion and judgment, the Insurance Commissioner decides to enter
or join the Nonadmitted Insurance Multi-State Agreement or any other
multistate agreement or compact with the same function and purpose
and other transaction reporting requirements are thereby
established.
SECTION 13. AMENDATORY 36 O.S. 2021, Section 1115, is
amended to read as follows:
Section 1115. A. Where Oklahoma is the home state of the
insured, every person licensed pursuant to Section 1106 of this
title shall collect and pay as provided in this section a sum for
premium tax based on the total gross premiums charged in connection
with any broker-procured surplus lines insurance, less any return
premiums, for surplus lines insurance sold to the Oklahoma home-
state insureds by the surplus lines broker or licensee.
B. Where Oklahoma is the home state of the insured and the
insurance covers properties, risks or exposures located or to be
performed both in and out of Oklahoma, the sum payable to the
Oklahoma Insurance Commissioner shall be computed based on an amount
equal to six percent (6%) of the total gross premiums whether the
properties, risks or exposures are located or to be performed inside
or outside Oklahoma. Any such unearned gross premium credited by
the state to the surplus lines broker or licensee shall be returned
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to the policyholder by the broker or licensee. The surplus lines
licensee or broker is prohibited from rebating, for any reason, any
part of the tax.
C. Where Oklahoma is the home state of the insured, gross
premiums charged for independently procured insurance, less any
return premiums, are subject to a premium tax at the rate of six
percent (6%) payable to the Oklahoma Insurance Commissioner, whether
the properties, risks or exposures are located or to be performed
inside or outside Oklahoma.
D. The Insurance Commissioner is authorized, in the exercise of
his or her sole discretion and judgment, to participate in the
Nonadmitted Insurance Multi-State Agreement or any other multistate
agreement or compact with the same function and purpose for the
function of collecting and disbursing to reciprocal states any funds
collected pursuant to the Unauthorized Insurers and Surplus Lines
Insurance Act applicable to other properties, risks or exposures
located or to be performed outside of Oklahoma. Until such time as
the Insurance Commissioner may, while not being required to, join
such multistate agreement or compact, premium taxes relating to
Oklahoma home-state insureds shall continue to be paid and accounted
for by nonadmitted insurers through their surplus lines licensees
and brokers as provided in subsections A through C B of this
section.
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E. D. When the surplus lines coverage of an Oklahoma home-state
insured covers properties, risks or exposures located only in
Oklahoma, the surplus lines licensee or broker or self-procuring
insured shall pay the surplus lines premium tax payable on such
Oklahoma-only risks solely to the Oklahoma Insurance Commissioner.
F. E. Should the Insurance Commissioner exercise his or her
sole discretion and judgment and decide to join the Nonadmitted
Insurance Multi-State Agreement or any other multistate agreement or
compact with the same function and purpose, the Insurance
Commissioner is authorized in such event to establish a uniform,
statewide rate of taxation applicable to lines of nonadmitted
insurance. This rate shall encompass all existing rates of
taxation, fees and assessments imposed by this state, pursuant to
subsections A through C B of this section, and the Insurance
Commissioner shall document the method by which the statewide rate
is calculated. The Insurance Commissioner is authorized to receive
any monies obtained as premium tax received through any multistate
agreement he or she may in the future, in his or her discretion,
choose to join and then disburse such funds as provided by the
Insurance Code and other applicable Oklahoma law.
G. F. Should the Insurance Commissioner exercise his or her
sole discretion and decide to join the Nonadmitted Insurance Multi-
State Agreement or any other multistate agreement or compact with
the same function and purpose, the Insurance Commissioner is
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authorized in such circumstances to utilize or adopt any allocation
schedule included in the Nonadmitted Insurance Multi-State Agreement
or any other multistate agreement or compact the Insurance
Commissioner may enter in the exercise of his or her sole discretion
and judgment, which schedule has the function and purpose of
allocating risk and computing the tax due on the portion of premium
attributable to each risk classification and to each state where
properties, risks or exposures are located.
H. G. Policies sold to federally recognized Indian tribes shall
be reported as provided in Section 1107 of this title; however,
these policies shall be exempt from the surplus line premium tax to
the extent that the Insurance Commissioner can identify that
coverage is for risks which are wholly owned by a tribe and located
within Indian Country, as defined in Section 1151 of Title 18 of the
United States Code.
I. H. The surplus line premium tax on insurance on motor
transit operations conducted between this and other states shall be
paid on the total premium charged on all surplus line insurance
less:
1. The portion of the premium charged for operations in other
states taxing the premium of an insured where Oklahoma is the home
state; or
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2. The premium for operations outside of this state of an
insured maintaining its headquarters office outside of this state
and branch office in this state.
J. I. Flood insurance policies where Oklahoma is the home state
of the insured and the insurance covers properties, risks or
exposures located in Oklahoma shall be exempt from the surplus line
premium tax.
K. J. Policies sold to any city or town in this state,
incorporated pursuant to law, or to any school district, as defined
in Section 1-108 of Title 70 of the Oklahoma Statutes, shall be
exempt from the surplus lines premium tax.
SECTION 14. AMENDATORY 36 O.S. 2021, Section 1116, is
amended to read as follows:
Section 1116. A. Any surplus lines licensee or broker who
fails to remit the surplus line tax provided for by Section 1115 of
this title, and any rules promulgated thereto, shall, after notice
and opportunity for a hearing, be liable for a civil penalty not to
exceed Twenty-five Dollars ($25.00) for each day of delinquency, per
policy, and may be subject to any additional applicable penalties
set forth in this act and the Oklahoma Producer Licensing Act,
Section 1435.1 et seq. of this title. The Insurance Commissioner
shall may use any lawful means available to collect the tax by
distraint and shall recover the penalty, including, but not limited
to, by distraint or by filing an action in the name of the State of
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Oklahoma. The Commissioner may request the Attorney General to
appear in the name of the state by relation of the Commissioner.
B. If any person, association or legal entity procuring or
accepting any insurance coverage from a surplus lines insurer where
Oklahoma is the home state of the insured, otherwise than through a
surplus lines licensee or broker, fails to remit the surplus line
tax provided for by Section 1115 of this title, the person,
association or legal entity shall, in addition to the tax, be liable
to a civil penalty in an amount equal to one percent (1%) of the
premiums paid or agreed to be paid for the policy or policies of
insurance for each calendar month of delinquency or a civil penalty
in the amount of Twenty-five Dollars ($25.00) whichever shall be the
greater. The Insurance Commissioner shall may use any lawful means
available to collect the tax by distraint and shall recover the
civil penalty in, including, but not limited to, by distraint or by
filing an action in the name of the State of Oklahoma in a court of
competent jurisdiction. The Commissioner may request the Attorney
General to appear in the name of the state by relation of the
Commissioner.
C. In addition to the penalties set forth in subsection A of
this section, the Insurance Commissioner may, after notice and
opportunity for a hearing, place on probation, censure, suspend,
revoke, or refuse to issue or renew the license of any producer and
surplus lines broker, and may issue a civil penalty of not more than
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One Thousand Dollars ($1,000.00) per occurrence, for any one or more
violations of this act or any insurance law, regulation, subpoena,
or order of the Insurance Commissioner.
SECTION 15. AMENDATORY 36 O.S. 2021, Section 1118, is
amended to read as follows:
Section 1118. A. Every surplus lines insurer issuing or
delivering a surplus line policy through a surplus lines licensee or
broker in this state shall conclusively be deemed thereby to have
irrevocably appointed the Insurance Commissioner as its attorney for
acceptance of service of all legal process, other than a subpoena,
issued in this state in any action or proceeding under or arising
out of the policy, and service of process upon the Insurance
Commissioner shall be lawful personal service upon the surplus lines
or nonadmitted insurer.
B. Each surplus line policy shall contain a provision stating
the substance of subsection A of this section, and designating the
person to whom the Insurance Commissioner shall mail process as
provided in subsection C of this section.
C. Triplicate copies of legal process against such an insurer
shall be served upon the Insurance Commissioner, and at time of
service, the plaintiff shall pay to the Insurance Commissioner
Twenty Dollars ($20.00), taxable as costs in the action. The
Insurance Commissioner shall immediately mail one copy of the
process so served to the person designated by the insurer in the
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policy for the purpose, by mail with return receipt requested. The
surplus lines or nonadmitted insurer shall have forty (40) days
after the date of mailing within which to plead, answer, or
otherwise defend the action.
SECTION 16. AMENDATORY 36 O.S. 2021, Section 1120, is
amended to read as follows:
Section 1120. Upon request of the Insurance Commissioner any
producer, surplus line broker, or person in Oklahoma who is the
insured under any policy issued by a surplus lines insurer upon a
subject of insurance resident, located, or to be performed in
Oklahoma at the time the policy was issued, or where the insured's
home state is Oklahoma, shall produce for examination all policies
and other documents evidencing and relating to the insurance, and
shall disclose the amount of the gross premiums paid or agreed to be
paid for the insurance, through whom the insurance was procured, and
such other information relative to the placing of the insurance as
may reasonably be required by the Insurance Commissioner.
SECTION 17. REPEALER 36 O.S. 2021, Section 1106.2, is
hereby repealed.
SECTION 18. This act shall become effective November 1, 2026.
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Passed the House of Representatives the 23rd day of March, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the _____ day of __________, 2026.
Presiding Officer of the Senate