What tax rate is levied on insureds who procure surplus lines insurance in Missouri?

The tax rate levied on insureds who procure surplus lines insurance in Missouri is indeed five percent. This tax is imposed to regulate and generate revenue from surplus lines transactions, which include insurance that is not available from authorized insurers in the state.

Surplus lines insurance is often used to cover unique risks that cannot be managed through standard insurance policies, making it crucial for the industry to have a systematic framework for taxation. The rate of five percent serves as an incentive for businesses to engage with surplus lines while ensuring that the state benefits from a consistent revenue stream related to these types of insurance.

Understanding the specific tax rate helps insureds factor in costs when choosing surplus lines insurance, allowing them to make informed decisions regarding their risk management strategies. The other rates, while they may seem plausible, do not align with the designated legal tax framework established for surplus lines in Missouri.