N.Y. Tax Law § 1510: Additional franchise tax on insurance corporations

§ 1510. Additional franchise tax on insurance corporations. (a)

Domestic, foreign and alien insurance corporations except life insurance

corporations. Except as hereinafter provided, for taxable years

beginning before January first, two thousand three every domestic

insurance corporation, every foreign insurance corporation and every

alien insurance corporation, other than such corporations transacting

the business of life insurance, (1) authorized to transact business in

this state under a certificate of authority from the superintendent of

financial services or (2) which is a risk retention group as defined in

subsection (n) of section five thousand nine hundred two of the

insurance law, shall, for the privilege of exercising corporate

franchises or for carrying on business in a corporate or organized

capacity within this state, and in addition to any other taxes imposed

for such privilege, pay a tax on all gross direct premiums, less return

premiums thereon, written on risks located or resident in this state.

The rate of tax imposed by this subdivision shall be two percent on

premiums written on or after January first, nineteen hundred

seventy-four and before January first, nineteen hundred seventy-five,

one and nine-tenths percent on premiums written on or after January

first, nineteen hundred seventy-five and before January first, nineteen

hundred seventy-six, one and eight-tenths percent on premiums written on

or after January first, nineteen hundred seventy-six and before January

first, nineteen hundred seventy-eight, one and two-tenths percent on

premiums written on or after January first, nineteen hundred

seventy-eight and before January first, nineteen hundred ninety-two and

one and three-tenths percent on premiums written on and after such date.

Provided, however, that the rate of tax imposed by this subdivision on

all gross direct premiums, less return premiums thereon, for accident

and health insurance contracts shall be one and six-tenths percent for

such premiums written on or after January first, nineteen hundred

seventy-four and before January first, nineteen hundred seventy-eight,

and one percent for such premiums written on or after January first,

nineteen hundred seventy-eight.

(b) Domestic, foreign and alien life insurance corporations. (1)

Except as hereinafter provided, every domestic life insurance

corporation, and every foreign and alien life insurance corporation

authorized to transact business in this state under a certificate of

authority from the superintendent of financial services, shall, for the

privilege of exercising corporate franchises or for carrying on business

in a corporate or organized capacity within this state, and in addition

to any other taxes imposed for such privilege, pay a tax on all gross

direct premiums, less return premiums thereon, received in cash or

otherwise on risks resident in this state, including supplemental

contracts for total and permanent disability benefits and accidental

death benefits. The rate of such tax shall be (i) one and six-tenths

percent on such premiums received on or after January first, nineteen

hundred seventy-four and before January first, nineteen hundred

seventy-eight, (ii) one percent on such premiums received on or after

January first, nineteen hundred seventy-eight and before January first,

nineteen hundred eighty-seven, (iii) eight-tenths percent on such

premiums received on or after January first, nineteen hundred

eighty-seven and before January first, nineteen hundred ninety-eight,

and (iv) seven-tenths percent on such premiums received on or after

January first, nineteen hundred ninety-eight.

(2) Every such life insurance corporation which shall obtain a

certificate of authority to transact business in this state or a renewal

of such certificate from the superintendent of financial services shall,

upon the expiration of such certificate for any cause or upon its

ceasing to transact new business in this state, continue to pay a tax

upon its business remaining in force in this state at the rate and as

computed in this subdivision.

(c) Determination of direct premiums--general provisions. (1) The term

"premium" includes all amounts received as consideration for insurance

contracts, reinsurance contracts or contracts with health maintenance

organizations for health services, other than for annuity contracts, and

shall include premium deposits, assessments, policy fees, membership

fees, any separate costs by carriers assessed upon their policyholders

and every other compensation for such contract. In ascertaining the

amount of direct premiums upon which a tax is payable under this section

there shall be first determined the amount of total gross premiums or

deposit premiums or assessments, less returns thereon, on all policies,

certificates, renewals, policies subsequently cancelled, insurance and

reinsurance executed, issued or delivered on property or risks located

or resident in this state, including premiums for reinsurance assumed,

and also including premiums written, procured or received in this state

on business which cannot specifically be allocated or apportioned and

reported as taxable premiums or which have been used as a measure of a

tax on business of any other state or states. Provided however, in the

case of special risk premiums, direct premiums shall include only those

premiums written, procured or received in this state on property or

risks located or resident in this state. The reporting of premiums for

the purpose of the tax imposed by this section shall be on a written

basis or on a paid-for basis consistent with the basis required by the

annual statement filed with the superintendent of financial services

pursuant to section three hundred seven of the insurance law.

(2) The term "gross direct premiums," as used in this section, shall

not include premiums for policies issued pursuant to section four

thousand two hundred thirty-six of the insurance law and premiums for

insurance upon hulls, freights, or disbursements, or upon goods, wares,

merchandise and all other personal property and interests therein, in

the course of exportation from, importation into any country, or

transportation coastwise, including transportation by land or water from

point of origin to final destination in respect to, appertaining to, or

in connection with, any and all risks or perils of navigation, transit

or transportation, and while being prepared for, and while awaiting

shipment, and during any delays, storage, transshipment or reshipment

incident thereto, including war risks and marine builder's risks. The

term "gross direct premiums," as used in this section, also shall not

include any premiums that this state is prohibited from taxing pursuant

to federal law, including (i) subsection (f) of section 8909 of title 5

of the united states code, (ii) subsection (g) of section 1395w-24 of

title 42 of the united states code, (iii) subsection (g) of section

1395w-112 of title 42 of the United States code, and (iv) subparagraph

(B) of paragraph (4) of subsection (k) of section 1395mm of title 42 of

the United States code.

(3) After determining the amount of total gross premiums, less returns

thereon, as hereinbefore provided, there shall be deducted the following

items:

(A) Such premiums, less return premiums thereon, which have been

received by way of reinsurance from corporations or other insurers

authorized to transact business in this state;

(B) Such premiums, less return premiums thereon, which have been

received by way of reinsurance from corporations or other insurers not

authorized to transact business in this state to the extent that such

premiums relate to transactions (i) that are authorized by section two

thousand one hundred five of the insurance law with respect to excess

line insurance, and (ii) with respect to which sums are payable by

licensed excess line brokers to the superintendent of financial services

pursuant to section two thousand one hundred eighteen of the insurance

law; and

(C) Dividends on such direct business, including unused or unabsorbed

portions of premium deposits paid or credited to policyholders, but not

including deferred dividends paid in cash to policyholders on maturing

policies, nor cash surrender values.

(4) In determining the amount of direct premiums taxable in this

state, all such premiums written, procured or received in this state

shall be deemed written on property or risks located or resident in this

state except such premiums as are properly allocated or apportioned and

reported as taxable premiums or which have been used as a measure of a

tax of any other state or states, provided however, in the case of

special risk premiums, direct premiums shall include only those premiums

written, procured or received in this state on property or risks located

or resident in this state.

(e) Powers and duties of the superintendent of financial services.

(1) The superintendent of financial services shall, on behalf of the

commissioner, have the power, duty and responsibility to examine returns

of an insurance corporation filed with him pursuant to section fifteen

hundred fifteen and, together with any other information within his

possession or that may come into his possession, to ascertain the

correct amount of tax imposed under this section of any insurance

corporation. For the purpose of ascertaining the correctness of any such

tax imposed under this section or for the purpose of making an estimate

of the tax liability under this section of any insurance corporation,

the superintendent shall have the power to examine or cause to have

examined by any agent or representative designated by him for that

purpose, any books, papers, records or memoranda bearing upon the

matters required to be included in the return.

(2) If the superintendent of financial services ascertains that the

amount of tax imposed under this section as shown on the return of any

insurance corporation is less than the amount of tax disclosed by his or

her examination, he or she shall propose, in writing, to the

commissioner the issuance of a notice of deficiency for the amount due.

If an insurance corporation fails to file a return with the

superintendent of financial services within the time required for the

filing of such return (with regard to any extension of time for the

filing thereof), the superintendent of financial services shall make an

estimate of the amount of tax due for the period in respect to which

such insurance corporation failed to file the return. The estimate shall

be made from any available information which is in the possession or may

come into the possession of the superintendent of financial services and

he shall propose, in writing, to the commissioner the issuance of a

notice of deficiency for the amount of such estimated tax. Any proposal

pursuant to this paragraph shall set forth the basis thereof and the

details of its computation.

(3) The commissioner shall, on receipt of a proposal from the

superintendent of financial services pursuant to paragraph two of this

subdivision, review such proposal and if satisfied as to the correctness

thereof shall take appropriate action under this chapter for the

assessment and collection of the amount of tax, together with interest

and penalties, either shown by such proposal to be due or which the

commissioner ascertains to be due. The provisions of this subdivision

shall not in any way be deemed to limit the power of the commissioner to

conduct such examination, or investigation as it deems necessary in

order to carry out its duties with respect to the taxes imposed under

this section.

(4) Subject to the consent of the superintendent of financial services

and notwithstanding any other provisions of law to the contrary, the

commissioner may delegate such other of his or her powers and duties

with respect to the administration and collection of the taxes imposed

under this section to the superintendent of financial services, as the

commissioner finds necessary in order to facilitate such administration

and collection.