Bulletin: KY2009002

Date:
November 25, 2009
To:
All Kentucky Issuing Offices
RE:
Changes in KY Municipal Premium Tax Reporting

Dear Associates:

The Commonwealth of Kentucky has imposed a new statutory framework found in KRS Chapter 91A that changes the requirements regarding reporting of Municipal Premium Tax. The effective date of the new statutes is January 1, 2010, and we intend to help you comply with these new requirements and ask that you assist us in our efforts to fully comply as well.

In summary, the new requirements mandate that each Municipal Premium Tax that is collected shall be verified by a "risk location system," which is also known as geotracking. This is designed to ensure that consumers who pay tax to a municipality pay the correct percentage to the correct taxing authority. As an agent of Stewart Title Guaranty, you currently calculate and collect the Municipal Premium Tax from the consumer and send it to us at the time the policy is remitted. Our Policy Services and accounting departments then aggregate the taxes we collect and pass them along to the appropriate entities per the coding that you supply.

This process is going to remain substantially similar to what has been done in the past, but will change somewhat to accommodate the new requirements. We have engaged a Kentucky-approved provider of geotracking software and will institute verification of the Municipal Premium Tax at the time the policy is remitted by using this software at our Policy Services Center. This software will be used to verify that the amount of tax reported to Stewart for the insured property address is correct. Thus, we will require that Schedule A of every policy that is issued contain a valid property address to enable this process to take place. Please ensure that you continue to send full copies of all polices with your reporting - this can include either electronic copies or hard copies. You should also continue to supply the tax amount and the coding information as to the Municipal Premium Tax that is being paid, as you have done in the past.

Please continue to send your premium remittance payments and Municipal Premium Tax payments with separate checks and clearly label these checks to indicate what is being sent. Thank you for your cooperation with this new process and we appreciate all you do for us.

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None