Colorado Clarifies Non-Admitted Insurance Premium Tax Reporting

The Colorado Division of Insurance has reissued Bulletin B-2.10, providing updated guidance for surplus lines brokers and organizations responsible for reporting non-admitted insurance premium tax. The bulletin confirms the use of the Florida Surplus Lines SLIP+ for States reporting platform and reiterates how the Non-admitted and Reinsurance Reform Act (NRRA) affects home-state tax obligations. With quarterly reporting requirements, strict filing deadlines, and potential penalties for noncompliance, the update serves as an important reminder for insurance professionals managing surplus lines activity involving Colorado risks.

New Reporting Platform for Surplus Lines Taxes

The Colorado Division of Insurance confirmed that all surplus lines premium tax filings must be submitted through the Florida Surplus Lines SLIP+ for States platform, a secure web-based reporting system. Colorado has contracted with the Florida Surplus Lines Service Office to administer the reporting and tax collection process.

This system applies to both surplus lines premium tax and independently procured insurance reporting. The requirement covers all policies and endorsements effective on or after January 1, 2025, meaning brokers and organizations placing non-admitted insurance must ensure they are using the correct filing platform.

Quarterly reporting remains in place, with four quarterly filings representing the annual reporting period for the previous calendar year.

Reinforcing Home-State Premium Tax Rules

The revised bulletin also reiterates how premium tax obligations are determined under the Non-admitted and Reinsurance Reform Act of 2010 (NRRA).

Under the NRRA, only the insured’s home state may require payment of premium taxes for non-admitted insurance policies. Colorado follows this federal standard but has not entered into any tax-sharing agreements or interstate compacts.

As a result, if an insured’s home state is Colorado, brokers must report and pay premium tax to Colorado based on 100% of the total net premium, even when the policy covers exposures located outside the state.

Colorado defines the insured’s home state primarily as:

• The state where the insured maintains its principal place of business, or
• For individuals, the state of the principal residence

In certain cases, when risks are located outside the insured’s principal location, the home state may instead be determined by where the largest portion of the taxable premium exposure is located.

Premium Tax Rate and Reporting Details

The Colorado premium tax rate for surplus lines business is 3% of the total net premium.

For reporting purposes, net premium includes:

• Premium amounts (including commissions)
• Any associated fees
• Less returned premiums

Importantly, the tax calculation applies to the entire premium amount, not just the portion related to Colorado exposures, when Colorado is considered the insured’s home state.

Filing Deadlines and Penalties

The Division also emphasized enforcement provisions for brokers who fail to file or remit required taxes on time.

If the annual statement or premium tax payment is not submitted before April 1, the surplus lines broker may face a $25 per day penalty for each day the filing remains delinquent. A formal penalty notice will be issued outlining the amount due and the payment deadline.

These penalties reinforce the importance of maintaining accurate records and ensuring reporting obligations are completed on schedule.

What This Means for Surplus Lines Brokers

While the revised bulletin does not introduce a brand-new regulatory framework, it provides clearer direction on the Division’s expectations regarding surplus lines tax reporting.

Brokers and compliance teams should review their internal workflows to ensure:

• Surplus lines policies are reported through the SLIP+ platform
• Quarterly reporting timelines are followed
• Premium calculations include the full net premium when Colorado is the home state
• Filing deadlines are tracked to avoid penalties

Organizations handling multi-state surplus lines placements should also verify their home-state determinations to ensure tax payments are directed to the appropriate jurisdiction.

Summary

Colorado’s revised Bulletin B-2.10 reinforces existing federal home-state tax principles while clarifying the state’s reporting process for non-admitted insurance premium tax. By confirming the use of the Florida Surplus Lines SLIP+ system and emphasizing reporting obligations, the Division of Insurance aims to streamline tax collection while maintaining compliance oversight.

Surplus lines brokers and compliance professionals should review these requirements carefully to ensure filings remain accurate, timely, and aligned with Colorado’s expectations.

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