Circular Letter No. 10 (2003)

May 30, 2003

TO:

ALL INSURANCE COMPANIES AUTHORIZED TO TRANSACT MOTOR VEHICLE LIABILITY INSURANCE BUSINESS IN NEW YORK

RE:

MOTOR VEHICLE LAW ENFORCEMENT FEE

STATUTORY REFERENCE:  INSURANCE LAW SECTION 9110

The Legislature recently amended Section 9110 of the New York State Insurance Law, entitled Motor Vehicle Law Enforcement Fee. This amendment is effective June 1, 2003.

This section requires every insurance company authorized to do business in this state to charge and collect an annual motor vehicle law enforcement fee from each holder of a policy issued or renewed with an effective date on or after July 1, 1992, in this state, or for delivery in this state, for motor vehicle liability insurance coverage.

The annual fee is now imposed at the rate of five dollars ($5) for each insured vehicle registered pursuant to the provisions of paragraph (b) of subdivision 1 of Section 401 of the New York State Vehicle and Traffic Law. Such fee shall be remitted monthly with form TA016 6/03 (attached) by insurance companies to the Superintendent of Insurance on or before the fifteenth of the month next succeeding the month in which such collections are received.

Vehicles excluded from the fee are:

  • motorcycles
  • electrically-driven mobility assistance devices operated or driven by a person with a disability
  • vehicles which run only upon rails or tracks
  • snowmobiles and all terrain vehicles as described in Articles forty-seven and forty-eight B of the Vehicle and Traffic Law
  • fire and police vehicles other than ambulances
  • farm-type tractors and all terrain type vehicles used exclusively for agricultural (purposes), or for snow plowing (other than for hire)
  • farm equipment, including self-propelled machines used exclusively in growing, harvesting or handling produce
  • self-propelled caterpillar or crawler-type equipment while being operated on the contract site.

The purposes for which the fee is to be expended are dependent upon the type of insured vehicle for which the fee is collected. In submitting the monthly payment to the Superintendent, each insurer must report the total of all monies collected from policyholders on private passenger motor vehicles subject to the provisions of paragraph (a) of subdivision 6 of Section 401of the Vehicle and Traffic Law and a separate total of all monies collected from policyholders on all other vehicles. Motor vehicles not subject to paragraph (a) include ambulances; motor vehicles owned or controlled by governmental entities; auto trucks and light delivery cars; tractors; buses; taxicabs and liveries; hearses; historical motor vehicles; trailers; semitrailers; coach or house trailers; and certain other motor vehicles as described in the aforementioned subdivision 6.

On or before the fifteenth day of February of each year, every insurer required to collect the fee must file an annual statement with the Superintendent, on a form to be furnished by the Superintendent, reporting the number and the fees collected during the immediately preceding year applicable to private passenger motor vehicles and all other vehicles, separately.

To clarify specific issues:

  • For policies issued for less than a year, the first collection of the five dollar ($5) fee shall begin with the first policy on its annual anniversary date or renewal date on or after June 1, 2003, whichever is earlier.
  • For vehicles added or replaced on or after June 1, 2003, on policies with an effective date prior to June 1, 2003, the five dollar ($5) fee shall be charged on the next renewal date.
  • The five dollar ($5) fee should be billed for any new vehicle resulting from either an addition to an existing policy or a change or replacement of vehicles on an existing policy with an effective date after June 1, 2003 at the time of such addition or replacement.
  • For any possible multi-year policies, the annual five dollar ($5) fee shall be charged on the next and subsequent anniversary date on or after June 1, 2003.
  • The fee shall be charged to the policyholder, and may not be calculated in rate filings.
  • There shall be no refund of the fee for vehicles eliminated from the policy.
  • The fee should be shown and separately identified either on a premium billing, or the declarations page of the policy, or in a separate written communication to the policyholder.
  • The insurance company records should be maintained in such a manner that amounts billed and collected from each policyholder can be identified.
  • There shall be no commission earned on the fee.
  • The fee is not subject to premium tax.
  • The refund of a fee by an insurer shall be made only if the policy for which it is received is cancelled without having become effective.

In lieu of reporting and paying the fee on a collected basis, insurance companies may remit and report on a written basis. Forms for reporting and submitting the payment of the fee are attached or are available at the Department’s website at: www.ins.state.ny.us. The forms may be reproduced as necessary.

Please acknowledge receipt of this letter and refer any related questions to:

Mrs. Lori A. Fraser
Director of Taxes and Accounts
New York State Insurance Department
One Commerce Plaza
Albany, NY 12257

Telephone No. (518) 474-8567

Very truly yours,

__________________________
Gregory V. Serio
Superintendent of Insurance