Surplus Line Filing Procedures, Rules & General Information

Unless subject to exemption, surplus line policies are assessed surplus line tax, stamping fee and, in some cases, fire marshal tax. These taxes and fees are levied upon the surplus line producer who is permitted by law to pass them on to the insured.  If the taxes and stamping fee are charged to the insured, they must each be shown as separate line items on the declarations page.  Attaching the EFS filing confirmation page is an acceptable substitute for this requirement.

The surplus line tax imposed by the State of Illinois is currently 3.5% of the premium, rounded to the nearest whole dollar. It is assessed against premium only. Do not include any broker fees, inspection fees or other items when calculating the tax - just what is shown as "premium" on the policy or endorsement. Twice per year, tax statements must be filed and any taxes due must be paid. Taxes are paid to the "Illinois Department of Insurance" and mailed to the address shown on the tax statement (which the SLAI will prepare and mail to you well ahead of the due date).  For more information regarding filing tax statements and paying taxes, click here.

Calculating the Surplus Line Tax

1. Figure Out Which Date to Use

2. Look Up the Date in the Rate Chart Below

* Rounded to the nearest whole dollar

3. Multiply the premium by the Surplus Line Tax Rate and round to the nearest whole dollar.

Example: A policy is issued with an effective date of November 1, 2002, a term of 12 months, and a premium of $100,000. The surplus line tax for the policy is $3,000 (using the 3.0% rate in effect on November 1, 2002). An endorsement is issued adding a new location effective August 1, 2003 for an additional premium of of $1,000. The surplus line tax for the endorsement is $30 (still using the 3.0% rate — the rate in effect on the policy effective date). An endorsement is issued to extend the policy for an additional two months with a premium of $10,000. The surplus line tax for that endorsement is $350 (using the 3.5% rate — the rate in effect on the first day of the policy extension period which begins November 1, 2003).

When filing a renewal certificate, policy extension or annual installment of a multiyear policy on the EFS, select "Policy" in the "Filing Type" field and enter the information as if it were a brand new policy. This will ensure that the surplus line tax calculates properly.

The fire marshal tax imposed by the State of Illinois is 1% of the fire premium, as described below. Like the surplus line tax, the fire marshal tax is rounded to the nearest whole dollar and is assessed against premium only. Fire marshal tax statements are due annually on February 1st, regardless of whether there are any taxes due. Taxes are paid to the State of Illinois and the taxes and statements should be mailed to the address shown on the tax statement. For more information regarding filing tax statements and paying taxes, click here.

* Rounded to the nearest whole dollar

1. Fire premiums that include allied lines are assessed the full 100%. If the premiums are separate and distinct (fire and allied) the allied lines portion may be assessed at 25%.

2. For policies covering multiple perils, if the premium charged for each peril is shown separately on the declarations page or elsewhere in the policy, compute the fire marshal tax on the premium for each peril separately using the chart above (with each computation rounded to the nearest dollar).

If the premiums are not broken out, compute the tax by charging the 1% tax rate against 40% of the entire policy premium.

Click here to see an example of these calculations.

As reported in our Bulletin 22, the Illinois Department of Insurance has issued guidance regarding the applicability of Fire Marshal tax to TRIA premiums on surplus line policies as follows:

1. For a stand-alone terrorism policy, the 1% Fire Marshal tax is charged against the full premium.
2. For terrorism coverage attaching to a policy covering other lines, one should consider how Fire Marshal tax would be charged if the policy did not include the TRIA coverage and apply the same rule to the terrorism premium.

For instance, if terrorism coverage is added to a general liability policy, Fire Marshal tax should not be charged since general liability coverage is not subject to the tax. If terrorism coverage is added to an all-risk, real property policy, the terrorism premium would be subject to the Fire Marshal tax at the same rate as the rest of the premium for the policy (i.e. 50% of the premium is subject to the 1% Fire Marshal tax).

Obviously, surplus line tax and stamping fee apply to TRIA premium just as they do to any other surplus line premium.

The Association stamping fee is currently 0.04% of the premium for policies effective 1/1/2023 or later. It applies to each surplus line premium processed through the Association and the rate is based on the policy effective date as shown on the table below. Like taxes, the stamping fee is rounded to the nearest whole dollar and is assessed against premium only. Stamping fees are paid to the Surplus Line Association of Illinois and mailed to the address shown on the invoice. 

The Association bills members on a monthly basis for business processed the preceding month. Members who have enrolled in Auto-Pay will have their account debited approximately two weeks after the billing date. For members paying by check, the stamping fee is due and payable immediately. In order to avoid being reported to the Department of Insurance as past due, your stamping fees must be paid on or before the 15th day of the following month. For example, filings made in July will be billed in the first week of August, and the stamping fees are past due if not paid by September 15th.

Electronic Auto-Pay of Stamping Fees is now available. Read more about it here.

You are permitted by law to pass the stamping fee (as well as the surplus line tax and fire marshal tax) on to the insured. If you pass these fees on to your insureds, they should be shown as separate items on the declarations page of the insurance contract.  Attaching the EFS filing confirmation page is an acceptable substitute for this requirement.

Taxes and fees for return premiums are handled in exactly the same manner as they are for additional premiums.

In the event your monthly Association stamping fee is a negative figure, it will be credited to your account or will be returned by the Association upon request.

To view, print or download the detailed activity that makes up your monthly stamping fee invoice, follow these instructions.

The Association is required by law to inform the Illinois Department of Insurance of any member who is 60 days delinquent in the payment of stamping fees.

Calculating the Stamping Fee

1. Figure Out Which Date to Use

2. Look Up the Date in the Rate Chart Below

* Rounded to the nearest whole dollar

3. Multiply the premium by the Stamping Fee Rate and round to the nearest whole dollar.

Example: A policy is issued with an effective date of June 1, 2022, a term of 12 months, and a premium of $40,000. The stamping fee for the policy is $30 (using the 0.075% rate that was in effect on June 1, 2022). An endorsement is issued adding a new location effective February 1, 2023 for an additional premium of of $8,000. The stamping fee for the endorsement is $6 (still using the 0.075% rate — the rate in effect on the policy effective date). In May 2023, an endorsement is issued to extend the policy for an additional six months with an additional premium of $20,000. The stamping fee for that endorsement is $8 (using the 0.04% rate — the rate in effect on the first day of the policy extension period which begins June 1, 2023). The extension endorsement should be filed on the EFS as if it were a new policy (because it introduces a new/additional policy period).

It's important, whenever you file a renewal certificate, policy extension or annual installment of a multiyear policy on the EFS, to select "Policy" in the "Filing Type" field and enter it as if it were a new policy. This will ensure that the stamping fee and taxes calculate properly.

The premium, Surplus Line Tax, Fire Marshal Tax and Association Stamping Fee as calculated for each policy or endorsement must be rounded to the nearest whole dollar. For each calculation involving less than 50 cents, round down to the next lowest whole dollar (less that 50 cents becomes zero) and for each calculation involving 50 cents or more, round up to the next highest whole dollar.

Pursuant to paragraph (3) of the Illinois Surplus Line Law [215 ILCS 5/445(3)(a)], the surplus line tax, fire marshal tax and stamping fee are levied upon the surplus line producer - not the insured. The surplus line producer is never exempt from these taxes or fees based on the nonprofit status or governmental entity status of the insured.

The surplus line producer is permitted by law (although not required) to pass the tax along to the insured [215 ILCS 5/445(3)(c)].

When processing a cancellation or return-premium endorsement, the return taxes and stamping fees are calculated in the exactly the same way as they are for a policy or an additional-premium endorsement. They are assessed against premium only and the rounding rule applies.

Surplus Line Tax, Fire Marshal Tax and Stamping Fee are applied only to the premium of a policy. Do not apply them to broker fees, policy fees, inspection fees or other non-premium items.