What tax rate is typically used for Independently Procured Coverage?

Independently Procured Coverage, often referred to as coverages that insured parties obtain directly from non-admitted insurers without a licensed surplus lines agent, generally utilizes the same tax rate as the surplus lines tax. This is because the regulatory framework is designed to ensure that all surplus lines transactions, whether they are procured through an agent or independently, contribute equally to the state's surplus lines tax base.

By applying the same rate, the system maintains consistency and fairness among insureds while also supporting the state's revenue from surplus lines activities. This also simplifies the compliance process for insureds who might procure coverage independently, as they can easily understand and anticipate the financial responsibilities associated with the tax.