You Have Questions, We Got Answers: Stamping Fee Edition

Oct 15, 2020 | eNews

Recently, TDI Commissioner Kent Sullivan signed an Order decreasing the stamping fee from the current rate of 0.15% of gross premium to 0.075%. The fee reduction correlates with the recommendation submitted by the SLTX Board on June 25, 2020. The fee decrease shall be effective January 1, 2021.

After the announcement was posted, SLTX received great questions regarding the new stamping fee change. To better communicate to the industry regarding the change, we have compiled the questions and provide information below.

Below are a few of the questions we received regarding the stamping fee change:

    • Is the stamp fee we are to use based on the policy inception date or endorsement effective date?
    • Will the stamping fee apply once to a policy term or each time there is a premium bearing endorsement added?
    • In regards to the decrease in stamping fee will this affect all transactions processed after January 1st, 2021, regardless of the issue date of the policy, or will this decrease begin with all policies that have an effective date of January 1st, 2021, and after and policies with dates prior to that will have the old stamping fee of .15%?
    • Can you clarify how the new stamping fee should be applied to endorsement transactions: Should we use the effective date of the endorsement or the policy’s original effective date to determine which stamping fee rate applies?

These are all similar questions, and all have a common answer:

To ensure consistency SLTX applies the same principle for stamping fee calculations as the Administrative Code defines for Surplus Lines taxes ( 34 TAC §3.822(b)(1-3). The new stamping fee rate will apply to each new or renewal surplus lines policy with an effective date on or after January 1, 2021. The new rate will also apply to policy date extensions if effective on or after this date. Policies effective on or before December 31, 2020, will run to expiration, cancellation, or next annual anniversary date (for multi-year policies) at the old rate of .15%. This includes any subsequent endorsements, audits, cancellations, reinstatements, installments, and monthly or quarterly reports.

For more information on the official Order, SLTX Board recommendation, and associated documents, please refer to the TDI website here.

The stamping office is here to provide aid and excellent customer service to all in our industry. If there are any questions or concerns, please utilize our “Submit your Questions” page on our website.