Introduced By: Senators Irons, Kelly, Enos and Bates
Date Introduced : January 6, 1999
It is enacted by the General Assembly as follows:
SECTION 1. Section 27-43-9 of the General Laws in Chapter 27-43 entitled "Captive Insurance Companies" is hereby amended to read as follows:
27-43-9. Tax on premiums collected. -- {ADD (a) ADD}
Each captive insurance company shall pay to the division of taxation,
on or before the first day of March of each year, a tax at the
rate of {DEL one percent (1%) on the gross amount of all DEL}
{ADD two tenths of one percent (.002) on the first 20 million dollars
($20,000,000) and fifteen one hundredths of one percent (.0015)
on the next 20 million dollars ($20,000,000) and one tenth of one percent (.001)
on the next 20 million dollars ($20,000,000) and thirty seven
and one half thousandths of one percent (.000375) on each dollar
thereafter on the direct ADD} premiums collected or contracted
for on policies or contracts of insurance {DEL covering property
or risks in this state and on risks and property situated elsewhere
upon which no premium tax is otherwise paid DEL} {ADD written
by the captive insurance company ADD} during the year ending December
31 next preceding, after deducting from the {DEL gross amount
of DEL} {ADD direct ADD} premiums subject to the tax the {DEL amount DEL}
{ADD amounts ADD} paid to policyholders as return premiums which
shall include dividends on unabsorbed premiums or premium deposits
returned or credited to policyholders.
{ADD (b) Each captive insurance company shall pay to the division of taxation on or before the first day of March of each year a tax at the rate of one hundred and twelve and one half thousandths of one percent (.001125) on the first 20 million dollars ($20,000,000) of assumed reinsurance premium, and seventy five thousandths of one percent (.00075) on the next 20 million dollars ($20,000,000) and twenty five thousandths of one percent (.00025) on the next 20 million dollars ($20,000,000) and twelve and one half thousandths of one percent (.000125) of each dollar thereafter. However, no reinsurance tax applies to premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection (a) of this section. No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if such transaction is part of a plan to discontinue the operations of such other insurer, and if the intent of the parties to such transaction is to renew or maintain such business with the captive insurance company. ADD}
{ADD (c) If the aggregate taxes to be paid by a captive insurance company calculated under subsections (a) and (b) of this section amount to less than twenty five hundred dollars ($2,500.00) in any year, such captive insurance company shall pay a tax of twenty five hundred dollars ($2,500.00) for such year. ADD}
{ADD (d) Two or more captive insurance companies under common ownership and control shall be taxed as though they were a single captive insurance company. ADD}
{ADD (e) For the purposes of this section, common ownership and control shall mean: ADD}
{ADD (1) In the case of stock corporations, the direct or indirect ownership of 80% (eighty percent) or more of the outstanding voting stock of two or more corporations by the same shareholder or shareholders; and ADD}
{ADD (2) In the case of mutual corporations, the direct or indirect ownership of 80% (eighty percent) or more of the surplus and the voting power of two or more corporations by the same member or members. ADD}
{ADD (f) A captive insurance company shall not be subject to the gross premium tax imposed under chapter 17 of title 44 of the general laws. ADD}
SECTION 2. This act shall take effect upon passage and shall apply retroactively to December 1, 1998.
