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This entry was published on 2022-05-13
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SECTION 1502-B
Computation of tax for captive insurance companies
Tax (TAX) CHAPTER 60, ARTICLE 33
§ 1502-b. Computation of tax for captive insurance companies. (a) In
lieu of the taxes and tax surcharge imposed by sections fifteen hundred
one, fifteen hundred two-a, fifteen hundred five-a, and fifteen hundred
ten of this article, every captive insurance company licensed by the
superintendent of financial services pursuant to the provisions of
article seventy of the insurance law, other than the metropolitan
transportation authority, the power authority of New York or any
statutory subsidiary thereof, and a public benefit corporation or
not-for-profit corporation formed by a city with a population of one
million or more pursuant to subsection (a) of section seven thousand
five of the insurance law, each of which is expressly exempt from the
payment of fees, taxes or assessments whether state or local, and other
than combinable captive insurance company, shall, for the privilege of
exercising its corporate franchise, pay a tax on (1) all gross direct
premiums, less return premiums thereon, written on risks located or
resident in this state and (2) all assumed reinsurance premiums, less
return premiums thereon, written on risks located or resident in this
state. The rate of the tax imposed on gross direct premiums shall be
four-tenths of one percent on all or any part of the first twenty
million dollars of premiums, three-tenths of one percent on all or any
part of the second twenty million dollars of premiums, two-tenths of one
percent on all or any part of the third twenty million dollars of
premiums, and seventy-five thousandths of one percent on each dollar of
premiums thereafter. The rate of the tax on assumed reinsurance premiums
shall be two hundred twenty-five thousandths of one percent on all or
any part of the first twenty million dollars of premiums, one hundred
and fifty thousandths of one percent on all or any part of the second
twenty million dollars of premiums, fifty thousandths of one percent on
all or any part of the third twenty million dollars of premiums and
twenty-five thousandths of one percent on each dollar of premiums
thereafter. The tax imposed by this section shall be equal to the
greater of (i) the sum of the tax imposed on gross direct premiums and
the tax imposed on assumed reinsurance premiums or (ii) five thousand
dollars.

(b) In determining the amount of gross direct premiums or assumed
reinsurance premiums taxable in this state, all 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.

(c) The definition of the term "premium" set forth in subdivision (c)
of section fifteen hundred ten of this article shall apply to this
section. In addition, "gross direct premium" shall be determined as
provided in such subdivision (c). Provided, however, that the term
"premium" shall also include any amount received by a captive insurance
company as consideration for insurance provided, in the case of a pure
captive insurance company, to its parents and affiliated companies, and,
in the case of a group captive insurance company, to the industrial
insureds that comprise the industrial insured group. The terms "pure
captive insurance company", "group captive insurance company",
"industrial insureds" and "industrial insured group" shall have the same
meanings as such terms have in section seven thousand two of the
insurance law. 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 seven
thousand six of the insurance law.

(d) The superintendent of financial services shall have the same
power, duty and responsibility to examine the returns of captive
insurance companies as such superintendent has with respect to insurance
corporations as set forth in subdivision (e) of section fifteen hundred
ten of this article.

(e) The credits set forth in section fifteen hundred eleven of this
article shall not be allowed against the tax imposed by this section.