What happens if a tax imposed by the surplus lines provisions is delinquent?

When a tax imposed by the surplus lines provisions is delinquent, it incurs a penalty of one percent per diem. This means that for each day the tax remains unpaid, a penalty of one percent is added to the amount owed. This structure is designed to encourage timely payment and compliance with tax obligations under the surplus lines regulations.

Understanding this penalty system is crucial for insureds and producers, as it highlights the importance of adhering to payment deadlines to avoid accumulating additional fees. Awareness of such consequences helps in managing financial liabilities associated with surplus lines insurance. Other options do not accurately reflect the policy regarding delinquent taxes; for instance, the tax is not automatically waived, nor is there a provision for locking it until paid. Thus, the correct answer underscores the financial responsibility that comes with surplus lines transactions.