1. The Laws of New York
  2. Consolidated Laws
  3. Tax
  4. Article 33: Franchise Taxes On Insurance Corporations


Section 1510 Additional franchise tax on insurance corporations

Tax (TAX)

(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.