The fee must be included as a part of the policy premium in the computation of premium taxes.

In the context of Michigan's surplus lines regulations, it is important to understand the treatment of fees related to premium taxes. The correct response indicates that the fee does not need to be included in the computation of premium taxes; therefore, the fee is considered separate from the policy premium when calculating those taxes.

Premium taxes are generally calculated based on the actual premium paid for the insurance policy. This excludes additional fees or surcharges that may be charged for administrative purposes or other costs unrelated to the core premium. This means that only the base premium amount that reflects the risk covered by the policy is subject to premium tax obligations.

Recognizing that fees can often vary in their treatment depending on state regulations is crucial in understanding this issue, but in Michigan, the rule is specific that those fees should not be included in premium tax calculations. Understanding the structure of insurance premiums and how different components are treated for tax purposes allows for greater accuracy in financial planning and compliance in the insurance industry.