What might trigger the filing of a surplus lines tax form in New Jersey?

The filing of a surplus lines tax form in New Jersey is triggered by placing coverage with non-admitted insurers. Surplus lines insurance is designed for situations where coverage cannot be obtained through the standard or admitted market. Non-admitted insurers are those that are not licensed by the state but are allowed to write certain types of insurance, often in unique or high-risk scenarios.

When a broker places coverage with a non-admitted insurer, they are typically required to file a surplus lines tax form to report the transaction. This is done to ensure that the appropriate tax is collected on the premium paid for the insurance coverage since these taxes help regulate the surplus lines market in the state. It is essential to note that this practice is aimed at maintaining oversight and compliance within the insurance industry.

Other options, such as purchasing insurance from admitted insurers or securing lower premiums from standard options, do not require the filing of surplus lines tax forms, as these transactions fall under the regulations of standard insurance practices rather than the surplus lines framework.