What is the regulatory fee on premium written?

The regulatory fee on premiums written in Michigan is 0.5%. This fee is imposed on surplus lines insurers to ensure compliance with state regulations and to support oversight responsibilities, including consumer protection and maintaining the integrity of the insurance market. The 0.5% rate has been established to balance the need for revenue generation for regulatory activities without imposing an undue burden on the insurance providers.

Understanding this fee is essential as it directly affects the cost of insurance products offered by surplus lines insurers. It is relevant for both insurers as they factor this cost into their pricing strategies and for agents who explain these fees to clients. The correct understanding of regulatory fees is crucial for compliance and for making informed decisions in the surplus lines market.

Other potential rates, such as 1%, 2%, or 3%, do not reflect the established regulatory fee, and it is important for industry professionals to stay current with these specific financial obligations to ensure accurate reporting and compliance.