Sec 20-416.01. Collection and payment of tax on surplus lines; multistate agreement

A. In accordance with the nonadmitted and reinsurance reform act of 2010, the director may enter into a compact or multistate agreement to provide for the reporting, payment, collection and allocation of taxes imposed pursuant to sections 20-401.07 and 20-416 on unauthorized surplus lines insurance covering multistate risks if, after a hearing conducted pursuant to section 20-161, it is determined that entering into a compact or multistate agreement is in the best interests of this state. In determining whether entering into a compact or multistate agreement is in the best interests of this state, the following factors shall be considered:

1. The impact on the state's gross receipt of premium taxes, if any.

2. The regulatory burden and costs placed on insurance companies, surplus lines brokers and insurance agents doing business in this state.

3. The cost impact on insureds resulting from any regulatory requirements attributable to a compact or multistate agreement, if any.

4. Other factors as may be raised by the director or any other interested party.

B. Taxes imposed pursuant to sections 20-401.07 and 20-416 on unauthorized insurance covering Arizona single-state risks shall not be covered by or payable through any compact or multistate agreement entered into by the director pursuant to subsection A of this section.

C. If a clearinghouse is not established or otherwise in operation or if the director does not enter into a multistate agreement or compact pursuant to subsection A of this section, any statements and taxes otherwise payable to a clearinghouse pursuant to this article shall be filed with the director or with a voluntary domestic organization of surplus lines brokers with which the director has contracted to accept reports pursuant to section 20-167.

D. The director may adopt reasonable rules to effectuate any provision of the nonadmitted and reinsurance reform act of 2010 (15 United States Code section 8201).