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304.49-220 Tax levied on premium receipts -- Rates -- Exclusivity of premium
tax -- Distribution of revenue for administration of KRS 304.49-010 to
304.49-230.
(1)
(2)
(3)
(4)
(5)
Every captive insurer holding a certificate of authority under KRS 304.49-010
to 304.49-230 shall return to the Department of Revenue a statement under
oath of all premium receipts on business written by the captive insurer during
the preceding year and shall pay, on or before March 1 in each year, a tax at
the rate of four-tenths of one percent (0.4%) on the first twenty million dollars
($20,000,000), and three-tenths of one percent (0.3%) on the next twenty
million dollars ($20,000,000), and two-tenths of one percent (0.2%) on the next
twenty million dollars ($20,000,000), and seventy-five thousandths of one
percent (0.075%) on each dollar thereafter on the direct premiums collected or
contracted for on policies or contracts of insurance written by the captive
insurer during the year ending December 31 next preceding, after deducting
from the direct premiums subject to the tax the amounts paid to policyholders
as return premiums, which shall include dividends on unabsorbed premiums or
premium deposits returned or credited to policyholders.
Every captive insurer holding a certificate of authority under KRS 304.49-010
to 304.49-230 shall return to the Department of Revenue a statement under
oath of all assumed reinsurance premium receipts during the preceding year
and shall pay, on or before March 1 in each year, a tax at the rate of two
hundred twenty-five thousandths of one percent (0.225%) on the first twenty
million dollars ($20,000,000) of assumed reinsurance premiums, and one
hundred fifty thousandths of one percent (0.150%) on the next twenty million
dollars ($20,000,000), and fifty thousandths of one percent (0.050%) on the
next twenty million dollars ($20,000,000), and twenty-five thousandths of one
percent (0.025%) of each dollar thereafter. However, no reinsurance tax
applies to premiums for risks or portions of risks which are subject to taxation
on a direct basis pursuant to subsection (1) of this section. No reinsurance
premium tax shall be payable in connection with the receipt of assets in
exchange for the assumption of loss reserves and other liabilities of another
insurer or self-insurer under common ownership and control if the transaction is
part of a plan to discontinue the operations of the other insurer or self-insurer,
and if the intent of the parties to the transaction is to renew or maintain the
business with the captive insurer.
If the aggregate taxes to be paid by a captive insurer calculated under
subsections (1) and (2) of this section amount to less than five thousand dollars
($5,000) in any year, the captive insurer shall pay a tax of five thousand dollars
($5,000) for such year.
Two (2) or more captive insurance companies under common ownership and
control shall be taxed as though they were a single captive insurer.
For the purposes of this section, common ownership and control shall mean:
(a) In the case of stock corporations, the direct or indirect ownership of eighty
percent (80%) or more of the outstanding voting stock of two (2) or more
corporations by the same shareholder or shareholders; and
(b) In the case of mutual corporations, the direct or indirect ownership of
eighty percent (80%) or more of the surplus and the voting power of two
(6)
(7)
(8)
(2) or more corporations by the same member or members.
In the case of a branch captive insurer, the tax provided for in this section shall
apply only to the branch business of the company.
The tax provided for in this section shall constitute all taxes collectible under
the laws of Kentucky from any captive insurer, and the taxes imposed under
this section shall be in lieu of all excise, license, occupational, or other taxes
imposed by the state, county, city, or other taxing district.
The Kentucky Department of Revenue shall annually, on or before June 30 of
each year, distribute ten percent (10%) of the premium tax revenues collected
pursuant to this section to the Department of Insurance for the regulation of
captive insurance companies under KRS 304.49-010 to 304.49-230.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1618, effective July 15, 2010; and
ch. 91, sec. 11, effective July 15, 2010. -- Amended 2005 Ky. Acts ch. 85,
sec. 680, effective June 20, 2005. -- Created 2000 Ky. Acts ch. 434, sec. 22,
effective July 14, 2000.
Legislative Research Commission Note (7/15/2010). This section was amended
by 2010 Ky. Acts chs. 24 and 91, which do not appear to be in conflict and have
been codified together.
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