{"data":{"id":"us-ky/krs-91a.080","jurisdiction":"us-ky","citation":"KRS 91A.080","heading":"License tax on insurance companies.","body":"(1) The legislative body of each local government which elects to impose and collect\nlicense fees or taxes upon insurance companies for the privilege of engaging in the\nbusiness of insurance may, except as provided in subsection (10) of this section,\nenact or change its license fee or rate of tax to be effective July 1 of each year on a\nprospective basis only and shall file with the commissioner of insurance at least one\nhundred (100) days prior to the effective date, a copy of all ordinances and\namendments which impose a license fee or tax. No less than eighty -five (85) days\nprior to the effective date, the commissioner of insurance shall promptly notify each\ninsurance company engaged in the business of insurance in the Commonwealth of\nthose local governments which have elected to impose the license fees or taxes and\nthe current amount of the license fee or rate of tax.\n(2) Any license fee or tax imposed by a local government upon an insurance company\nwith respect to life insurance policies may be based upon the  first year's premiums,\nand, if so based, shall be applied to the amount of the premiums actually collected\nwithin each calendar quarter upon the lives of persons residing within the corporate\nlimits of the local government.\n(3) Any license fee or tax imposed by a local government upon any insurance company\nwith respect to any policy which is not a life insurance policy shall be based upon\nthe premiums actually collected by the insurance company within each calendar\nquarter on risks located within the corporate limits of the local government on those\nclasses of business which the insurance company is authorized to transact, less all\npremiums returned to policyholders. In determining the amount of license fee or tax\nto be collected and to be paid to the local  government, the insurance company shall\nuse the tax rate effective on the first day of the policy term. When an insurance\ncompany collects a premium as a result of a change in the policy during the policy\nterm, the tax rate used shall be the rate in effec t on the effective date of the policy\nchange. With respect to premiums returned to policyholders, the license fee or tax\nshall be returned by the insurance company to the policyholder pro rata on the\nunexpired amount of the premium at the same rate at whic h it was collected and\nshall be taken as a credit by the insurance company on its next quarterly report to\nthe local government.\n(4) The Department of Insurance shall, by administrative regulation, provide for a\nreasonable collection fee to be retained by the insurance company or its agent as\ncompensation for collecting the tax, except that the collection fee shall not be more\nthan fifteen percent (15%) of the fee or tax collected and remitted to the local\ngovernment or two percent (2%) of the premiums subj ect to the tax, whichever is\nless. To facilitate computation, collection, and remittance of the fee or tax and\ncollection fee provided in this section, the fees or taxes set out in subsection (1), (2),\nor (3) of this section, together with the collection fee in this section, may be rounded\noff to the nearest dollar amount.\n(5) Pursuant to KRS 304.3 -270, if any other state retaliates against any Kentucky\ndomiciliary insurer because of the requirements of this section, the commissioner of\ninsurance shall impo se an equal tax upon the premiums written in this state by\ninsurers domiciled in the other state.\n(6) Accounting and reporting procedures for collection and reporting of the fees or\ntaxes and the collection fee herein provided shall be determined by admini strative\nregulations promulgated by the Department of Insurance.\n(7) (a) Upon written request of the legislative body of any local government, at the\nexpense of the requesting local government, which shall be paid in advance by\nthe local government to the Department of Insurance, the Department of\nInsurance shall audit, or cause to be audited by contract with qualified\nauditors, the books or records of the insurance companies or agents subject to\nthe fee or tax to determine whether the fee or tax is being p roperly collected\nand remitted, and the findings of the audit shall be reported to the local\ngovernment and the insurance company subject to the audit. An insurance\ncompany may appeal the findings of the audit conducted under this subsection\nand any assess ment issued pursuant to the audit findings in accordance with\nthe provisions of KRS 91A.0804(5).\n(b) Willful failure to properly collect and remit the fee or tax imposed by a local\ngovernment pursuant to the authority granted by this section shall constitu te\ngrounds for the revocation of the license issued to an insurance company or\nagent under the provisions of KRS Chapter 304.\n(c) If the Department of Insurance finds that an insurance company has willfully\nengaged in a pattern of business conduct that fai ls to properly collect and\nremit the fee or tax imposed by a local government pursuant to the authority\ngranted by this section, the Department of Insurance may assess the\nresponsible insurance company an appropriate penalty fee no greater than ten\npercent (10%) of the additional license fees or taxes determined to be owed to\nthe local government. The penalty fee shall be paid to the local government\nowed the license fee or tax less any administrative costs of the Department of\nInsurance in enforcing this s ection. Any insurance company or agent held\nresponsible for a penalty fee may request a hearing with the Department of\nInsurance to be conducted pursuant to KRS 304.2 -310 to 304.2-370 regarding\nthe finding of a willful violation and the subsequent penalty fee.\n(8) The license fees or taxes provided for by subsections (2) and (3) of this section shall\nbe due thirty (30) days after the end of each calendar quarter. Annually, by March\n31, each insurance company shall furnish each local government to which the tax or\nfee is remitted with a breakdown of all collections in the preceding calendar year for\nthe following categories of insurance:\n(a) Casualty;\n(b) Automobile;\n(c) Inland marine;\n(d) Fire and allied perils;\n(e) Health; and\n(f) Life.\n(9) Any license fee or tax not paid on or before the due date shall bear interest at the tax\ninterest rate as defined in KRS 131.010(6) from the date due until paid. Such\ninterest payable to the local government is separate of penalties provided for in\nsubsection (7) of this section. In addition, the local government may assess a ten\npercent (10%) penalty for a tax or fee not paid within thirty (30) days after the due\ndate.\n(10) No license fee or tax imposed under this section shall apply to premiums:\n(a) Received on policies of group health insurance provided for state employees\nunder KRS 18A.225;\n(b) Received on policies insuring employers against liability for personal injuries\nto their employees or the death of their employees caused thereby, under the\nprovisions of KRS Chapter 342;\n(c) Received on health insurance policies issued to individuals;\n(d) Received on policies issued through Kentucky Access created in Subtitle 17B\nof KRS Chapter 304;\n(e) Received on policies for high deductible health plans as defi ned in 26 U.S.C.\nsec. 223(c)(2);\n(f) Received on multistate surplus lines, defined as non -admitted insurance as\nprovided in Title V, Subtitle B, the Non -Admitted and Reinsurance Reform\nAct of 2010, of the Dodd -Frank Wall Street Reform and Consumer Protection\nAct, Pub. L. No. 111-203;\n(g) Paid to insurance companies or surplus lines brokers by nonprofit self -\ninsurance groups or self -insurance entities whose membership consists of\nschool districts; or\n(h) Paid to insurance companies or surplus lines brokers b y nonprofit self -\ninsurance groups or self -insurance entities whose membership consists of\ncities, counties, charter county governments, urban -county governments,\nconsolidated local governments, unified local governments, school districts, or\nany other political subdivisions of the Commonwealth.\n(11) No county may impose the tax authorized by this section upon the premiums\nreceived on policies issued to public service companies which pay ad valorem taxes.\n(12) Insurance companies which pay license fees or ta xes pursuant to this section shall\ncredit city license fees or taxes against the same license fees or taxes levied by the\ncounty, when the license fees or taxes are levied by the county on or after July 13,\n1990. For purposes of this subsection, a consolid ated local government, urban -\ncounty government, charter county government, or unified local government shall\nbe considered a county.\n(13) No license fee or tax imposed under this section shall apply to premiums paid to\ninsurers of municipal bonds, leases, or other debt instruments issued by or on behalf\nof a city, county, charter county government, urban -county government,\nconsolidated local government, special district, nonprofit corporation, or other\npolitical subdivision of the Commonwealth. However, thi s exemption shall not\napply if the bonds, leases, or other debt instruments are issued for profit or on behalf\nof for-profit or private organizations.\n(14) A county may impose a license fee or tax covering the entire county or may limit\nthe application of the fee or tax to the unincorporated portions of the county.","path":["KRS Chapter 91A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=43399","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:49Z","sha256":"4af86fe12362277e5df87e8d4e1df8534b41e6347654ecd23252bbbe946f46e9","source_id":"us-ky","stale":false,"prev":"us-ky/krs-91a.070","next":"us-ky/krs-91a.0802"},"notice":"GroundRules: Original legal text. Not legal advice."}