The Delaware Department of Insurance published a bulletin reminding surplus lines brokers that they are required to collect and remit annual taxes on surplus lines policies placed during the previous calendar year.

18 Del. C. § 1925 states that surplus lines brokers must collect a three percent tax on the gross premiums charged for insurance placed in Delaware, and remit that amount to the State Treasurer. If a policy covers properties or risks only partially located in Delaware, but Delaware is the home state of the insured, then the policy is still considered to be written on properties or risks in the state.

The Department has found instances of brokers in violation of the statute and reminds them that failure to comply may result in regulatory review and enforcement action.