7.3 The Stamping Fee, Monthly Billing and Payment, and TDI Late-Filing Fees
Key Takeaways
- The stamping fee is 0.04% of gross premium for policies with inception on or after January 1, 2024 (0.075% for 2021-2023 inceptions); it is paid by the insured and applies even to tax-exempt or federally preempted premium.
- The Stamping Office compiles each agent's filings within 10 days after month-end and sends a notice of fees due, and the agent must pay by the end of the month in which it receives the notice (28 TAC § 15.106(c)); invoices more than 90 days past due are reported to TDI.
- For a policy filed late but within 180 days, the commissioner may assess $50 per policy, or $100 per policy if more than 5% of the agent's filings were late in the prior calendar year (TIC § 981.105(d)).
- For a policy filed after 180 days but before 365 days by an agent with no more than 2% late filings in the prior year, the fee is $200 per policy (TIC § 981.105(e)).
- Late filing exposes the agent to Chapters 81, 82, and 84 only if it fails to pay the fee, files on or after the 365th day, or files between 180 and 365 days with more than 2% late filings in the prior year (TIC § 981.105(h)).
7.3 The Stamping Fee, Monthly Billing and Payment, and TDI Late-Filing Fees
Two separate charges arise from Stamping Office filings. The stamping fee funds the office and is paid on every policy. Late-filing fees are assessed by the commissioner, not the Stamping Office, when filings miss the 60-day deadline. The exam tests who sets each, how much each is, and when late filing becomes a disciplinary matter.
1. Legal Basis for the Stamping Fee
- Statute: The Stamping Office collects from each surplus lines agent a stamping fee for its operating costs. The fee is paid by the insured, determined by the department, and may not exceed three-fourths of one percent of gross premium (TIC § 981.154(b)(5)).
- Rules: The agent must submit a stamping fee, as approved by TDI, for each policy, contract, or evidence of coverage on Texas risks, including additions, deletions, and cancellations (28 TAC § 15.103). Each surplus lines contract must contain the stamping fee (§ 15.5(a)(3)).
- Changes: The board recommends; the commissioner publishes Texas Register notice with a 20-day comment period and approves or denies by order (28 TAC § 15.201(e)).
Rate History (SLTX)
| Policy Inception Dates | Stamping Fee | Surplus Lines Tax |
|---|---|---|
| January 1, 2024 and after | 0.04% | 4.85% |
| January 1, 2021 - December 31, 2023 | 0.075% | 4.85% |
| January 1, 2016 - December 31, 2020 | 0.15% | 4.85% |
| July 1, 2007 - December 31, 2015 | 0.06% | 4.85% |
| July 1, 2003 - June 30, 2007 | 0.10% | 4.85% |
The rate follows the policy's inception date. Policies effective on or before December 31, 2023 stay at 0.075% until expiration, cancellation, or the next annual anniversary of a multi-year policy, including their endorsements, audits, cancellations, and installments.
2. Calculating the Fee
Stamping fee = gross premium x 0.04% (for 2024 and later inceptions).
- Example 1: A $255,000 gross premium (base premium plus insurer and MGA fees) produces a stamping fee of $255,000 x 0.0004 = $102.00. The 4.85% tax on the same fully taxable premium is $12,367.50.
- Example 2 (exempt premium): A $500,000 marine package allocates 20% of premium to federal waters. Tax applies only to the $400,000 of taxable premium ($19,400.00), but SLTX states that tax-exempt and federally preempted policies are still subject to stamping fees, so the fee is on the full $500,000 ($200.00).
- The stamping fee is not consideration for insurance, so it is not part of the 4.85% tax base (Section 8.1).
- Return premium on cancellations and deletions generates a corresponding stamping fee adjustment, because additions, deletions, and cancellations are all filed and carry fees (28 TAC § 15.103).
3. Monthly Billing and Payment
- Rule: Within 10 days after the end of each month, the Stamping Office compiles each agent's filings and sends a notice of the total stamping fees due. The agent must pay by the end of the month in which it receives the notice (28 TAC § 15.106(c)).
- SLTX practice: Processing closes at 6:30 p.m. Central on the last day of the month. Online filers see the invoice the next morning, and mail filers receive it during the first week of the month. Payment is due by the end of the month following the processing month, so January's processing is due by the end of February. SLTX reports invoices more than 90 days past due to TDI, and it does not accept a partial payment of a month's invoice.
- Consequences: Failing to collect and pay stamping fees is a sanction ground (28 TAC § 15.4(a)(4)). An agent whose license is suspended or revoked will not be reinstated until delinquent stamping fees are paid (§ 15.4(c)).
4. Late-Filing Fees Assessed by the Commissioner (TIC § 981.105(c)-(i))
The commissioner may assess a fee against an agent who files a policy after the 60-day deadline.
| When the Late Policy Is Filed | Agent's Late-Filing Rate in the Prior Calendar Year | Fee per Late Policy | Chapters 81, 82, 84 Sanctions? |
|---|---|---|---|
| Day 61 through day 180 | Not more than 5% | $50 | No, if the fee is timely paid |
| Day 61 through day 180 | More than 5% | $100 | No, if the fee is timely paid |
| After day 180 but before day 365 | Not more than 2% | $200 | No, if the fee is timely paid |
| After day 180 but before day 365 | More than 2% | (no fee tier) | Yes |
| Day 365 or later | Any | (no fee tier) | Yes |
- When sanctions apply (§ 981.105(h)): A late-filing agent is subject to Chapters 81 (discipline), 82 (sanctions), and 84 (administrative penalties) only if it (1) fails to timely pay an assessed fee, (2) files on or after the 365th day, or (3) files between the 181st and 364th day while having more than 2% late filings in the prior calendar year.
- Fee is not a violation (§ 981.105(g)): Assessing or paying a late-filing fee does not establish a violation for certain disciplinary and multi-state notice purposes.
- Billing (§ 981.105(i)): TDI notifies each agent of the fees assessed for a calendar year by June 15 of the following year, and the agent must pay within 30 days after the notice.
Untimely-Filing Reports and Disputes (28 TAC § 15.114)
- By the 15th of each month, the Stamping Office provides or makes available a report of the agent's untimely filings from the prior month. The agent must check it.
- If the agent believes a listed policy was timely, it must, by the earlier of 90 days after the report or February 15 of the following year, correct the record electronically or notify the Stamping Office with supporting documentation.
- The Stamping Office reviews the dispute by the earlier of 30 days or March 1 and sends TDI a summary and opinion. TDI decides by the earlier of 45 days or March 15.
- An agent who does not follow this process waives the right to dispute timeliness later.
- By the first business day of April, the Stamping Office sends TDI an annual report of all untimely filings for the prior year.
Exam Warning: The Stamping Office reports late filings; the commissioner assesses late-filing fees; and TDI alone imposes sanctions. The Stamping Office has no enforcement authority (TIC § 981.160).
A Texas surplus lines policy with a March 2026 inception has a gross premium of $300,000. What stamping fee applies?
A surplus lines agent files a policy 120 days after its effective date, which was also its issue date. In the prior calendar year, 3% of the agent's required filings were late. What late-filing consequence applies under TIC § 981.105?
An agent files a policy 250 days after its effective date. In the prior calendar year, 4% of the agent's required filings were late. What is the agent's exposure?
The Stamping Office's notice of stamping fees for January filings reaches a surplus lines agent in early February. Under 28 TAC § 15.106(c), when must the agent pay?