1078                           LAWS OF MARYLAND                      [CH. 553

of each daily report, if any, and of each binder or coyer note deliv-
ered by him. The records shall be available for examination by the
Commissioner at any reasonable time within three (3) years after
the issuance of the coverage to which it relates.

(b) Within sixty days following December 31st and June 30th of
each year the broker shall file with the Commissioner a semi-annual
statement which shall be open to public inspection and which reports:

(1)   The gross amount of each kind of insurance business trans-
acted and the aggregate gross premiums charged;

(2)   The aggregate of returned premiums and taxes paid to
insureds;

(3)   The aggregate of net premiums; and

(4)  Such additional information as the Commissioner may reason-
ably require.

194.    Surplus Lines Tax.

(a)   The premiums charged for surplus lines coverages are sub-
ject to a premium receipts tax of 3% on all gross premiums less
any returned premiums charged for such insurance. The surplus
lines broker shall charge the insured the amount of the tax at
the time of delivery of the cover note, certificate of insurance, policy
or other initial confirmation of insurance, in addition to the full
amount of the gross premium charged by the insurer for the insur-
ance, provided, however, that the tax on any unearned portion of the
premium shall be returned to the policyholder by the surplus lines
broker. The surplus lines broker is prohibited from absorbing such
tax, or, as an inducement for insurance or for any other reason,
rebating all or any part of such tax or of his commission.

(b)    The surplus lines broker shall pay the taxes under sub-
section (a) to the Commissioner on a monthly basis; and shall
on or before the 15th day of each month forward to the Commis-
sioner the amount of premium receipts taxes due upon business done
during the preceding month.

(c)   If the surplus lines policy covers risks or exposures only par-
tially in this State, the tax payable shall be computed on the portions
of the premium which is properly allocable to the risks or exposures
located in this State.

(d)   This section does not apply to reinsurance or insurance of
risks referred to in section 199, nor to insurance of risks of the
State Government.

195.    Penalty for Failure to File Statement or Pay Tax.

Every surplus line broker who fails to make and file the semi-
annual statement as required under section 193 or to pay the taxes
as required under section 194, shall be liable to a penalty of twenty-
five dollars ($25) for each seven days of delinquency. The tax and
penalty may be recovered in an action instituted by the Commis-
sioner in the name of the State in any court of competent juris-
diction, the Attorney General representing him. The surplus line
broker's license shall also be subject to revocation as provided in
section 196.