Who is responsible for paying taxes on Independently Procured Coverage?

Who is responsible for paying taxes on Independently Procured Coverage?

• A. The insurance company
• B. The state government
• C. The insured
• D. The insurance agent

Answer: (C)

In the context of Independently Procured Coverage, the insured holds the responsibility for paying taxes. This is because Independently Procured Coverage refers to insurance that is purchased directly by the insured from a non-admitted insurance company without going through a licensed surplus lines agent. When this type of coverage is obtained, the state imposes a tax on the premium paid, and it is the insured's responsibility to report and remit this tax to the state. This principle underscores the insured's role in managing their insurance tax obligations, which is distinct from responsibilities assigned to insurance companies, agents, or state governments.

In the context of Independently Procured Coverage, the insured holds the responsibility for paying taxes. This is because Independently Procured Coverage refers to insurance that is purchased directly by the insured from a non-admitted insurance company without going through a licensed surplus lines agent. When this type of coverage is obtained, the state imposes a tax on the premium paid, and it is the insured's responsibility to report and remit this tax to the state. This principle underscores the insured's role in managing their insurance tax obligations, which is distinct from responsibilities assigned to insurance companies, agents, or state governments.