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SECTION 1510
Additional franchise tax on insurance corporations
Tax (TAX) CHAPTER 60, ARTICLE 33
§ 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.