The 2011 Rhode Island state budget, which was enacted as HB 7397A and signed into law June 2, 2010, amends the taxation statutes applicable to surplus lines insurers and the Medical Malpractice Joint Underwriters Association.  Article 9 of HB 7397A contains both amendments.

HB 7397A increases the tax rate on surplus lines insurance from three percent (3%) to four percent (4%) of gross premiums.  The one percent (1%) increase brings the Rhode Island surplus lines tax rate in line with the rates imposed by neighboring states Massachusetts and Connecticut.  It is unclear at this time whether this increase will result in a similar increase to the tax rate on insurance obtained through direct procurement, which is currently taxed at a rate of three percent (3%) of gross premiums.

HB 7397A also imposes Rhode Island’s two percent (2%) tax on gross insurance premiums to the Medical Malpractice Joint Underwriters Association, which had previously been exempt from the tax.

To view Article 9 of HB 7397A, click here.