Important Notification Regarding Kentucky from Arch MI
As you are aware, local governments in Kentucky are allowed to collect taxes on insurance premiums from properties located within their jurisdiction under KRS 91A.080. The taxes assessed depend on the county and city of the property and can vary depending on the taxing authority rules. Moreover, local tax rates are subject to change, depending on the jurisdiction. Generally, the applicable rates are published in April or May and effective July 1. However, jurisdictions can change boundary borders and tax rates at other times of the year.
As noted in Kentucky Local Government Premium Tax Schedule Bulletin (2015-2016), Number 2015-02, in order to assist insurance companies in determining the appropriate location of properties, and to assess the correct amount of local tax, insurance companies “shall employ a verified risk location system or program” approved by the Kentucky Department of Insurance. One of the requirements of a verified system is that it is updated at least quarterly.
As part of the continual effort to ensure compliance with Kentucky Department of Insurance requirements, as of January 1, 2016, Arch Mortgage Insurance Company (Arch MI) will be upgrading our systems to ensure real-time capture of premium tax changes made by local jurisdictions. This may result in changes to the amount of tax assessed on individual loans, to conform to the latest information from local governments. Moreover, premium tax rate changes may occur periodically, as local jurisdictions make changes during the year.
Arch MI appreciates your cooperation in regard to this upgrade to our systems.
If you have any questions, please contact Arch MI’s Policy Servicing at 1.800.909.4264 or firstname.lastname@example.org.