Why Are Taxes and “Stamping Fees” Charged?

Companies doing business on a ‘non-admitted’ or ‘surplus lines’ basis are required to remit state taxes for every policy sold. This basically a sales tax charged by the state for each and every policy issued.

In addition, some states, such as Texas, have a separate ‘stamping fee’ which is intended to support the state ‘Stamping Office’.  This office is tasked with receiving, recording, and reviewing surplus lines policies. In addition, it evaluates the financial condition of insurance companies desiring to write surplus lines insurance in the state and, lastly, it provides education and training resources for surplus lines agents and insurers.

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