2013 New York Consolidated Laws
ISC - Insurance
Article 91 - (9101 - 9111-C) TAXES AND FEES
9111-B - Temporary franchise tax on certain insurance companies.

 
    §  9111-b. Temporary franchise tax on certain insurance companies. (a)
  Imposition. (1) For the privilege of conducting business in  this  state
  and  in  addition  to  any  other requirements therefor, every insurance
  company subject to the franchise  tax  imposed  by  subdivision  (a)  of
  section  fifteen  hundred  ten  of  the  tax  law,  other than insurance
  companies whose  premiums  are  received  solely  as  consideration  for
  accident and health insurance policies, shall pay a franchise tax of one
  percent  of  all  gross  direct  premiums, less return premiums thereon,
  written during the  "event  year",  as  such  term  is  defined  in  the
  following  sentence, on risks located or residing in this state. For the
  purposes of this section, "event year" shall mean (A) the calendar  year
  preceding  the  February  fifth  on  which  the  superintendent fails to
  provide a certification  to  the  state  commissioner  of  taxation  and
  finance  that  the  return  of  premium  amounts  to the hospital excess
  liability pool that has been authorized by  subsection  (a)  of  section
  five  thousand five hundred seventeen-a of this chapter has been made or
  (B) the calendar year preceding the  year  in  which  a  final  judicial
  determination invalidating some or all of the provisions of such section
  five  thousand  five  hundred  seventeen-a  requires  a  return from the
  hospital excess liability pool of any or  all  of  the  premium  amounts
  returned  to  such  pool  pursuant  to  such  section five thousand five
  hundred seventeen-a or (C) calendar year nineteen hundred ninety-nine if
  the superintendent  directs  and  the  association  fails  to  make  the
  transfer  and  deposit to the hospital excess liability pool pursuant to
  subsection (d) of section  five  thousand  five  hundred  nine  of  this
  chapter  or  (D)  the  calendar year preceding the year in which a final
  judicial determination invalidating some or all  of  the  provisions  of
  such  section five thousand five hundred nine requires a return from the
  hospital excess liability pool of any or all of the amounts  transferred
  and  deposited  to  such pool pursuant to subsection (d) of section five
  thousand five hundred nine.
    (2) Determination of direct premiums-general provisions. (A) The  term
  "premium"  includes  all amounts received as consideration for insurance
  contracts or reinsurance contracts, other than  for  annuity  contracts,
  and shall include premium deposits, assessments, policy fees, membership
  fees,  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 return 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 this chapter.
    (B)  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  this  chapter  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  county,  or
  transportation coastwide, 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.
    (C) After determining the amount of total gross premiums, less returns
  thereon, as hereinbefore provided, there shall be deducted the following
  items:
    (i)  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;
    (ii) 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.
    (D)  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.
    (b) Payment. Taxes due  under  this  section  shall  be  paid  to  the
  superintendent in such manner as the superintendent shall prescribe. The
  tax  shall  be  paid in two installments. The first installment shall be
  due  within  thirty  days  of  the  time  at  which  the  superintendent
  determines  such  tax  is  to  be  paid and shall be no less than ninety
  percent of the tax ultimately determined to be due under  this  section.
  The  balance  of  any tax due shall be paid on the next succeeding March
  twenty-fifth. The superintendent is hereby authorized  and  directed  to
  deposit payments made under this section, and any interest and penalties
  thereon,  into  the  hospital  excess liability pool created pursuant to
  subdivision five of section eighteen of chapter two hundred sixty-six of
  the laws of nineteen hundred eighty-six, as amended.
    (c) Returns and reports.  A  return,  in  a  form  prescribed  by  the
  superintendent,  shall accompany the tax payment due March twenty-fifth.
  In addition, the superintendent may prescribe a return to accompany  the
  first installment.
    (d)  Interest and penalties. (1) Interest. If any amount of tax is not
  paid on or before the date prescribed for payment thereof  in  paragraph
  two  of  this  subsection,  interest  on  such  amount  of  tax  at  the
  underpayment rate set  by  the  commissioner  of  taxation  and  finance
  pursuant  to  section  one  thousand ninety-six of the tax law, plus one
  percentage point, shall be paid to the  superintendent  for  the  period
  from the date prescribed for payment until the date paid.
    (2)  Underpayment  penalty.  If  the  amount  of  tax  paid  by  March
  twenty-fifth is less than ninety-five  percent  of  the  tax  ultimately
  determined  to  be  due  pursuant  to  this section, a penalty is hereby
  imposed equal to one hundred  percent  of  the  difference  between  the
  amount  of  tax  actually  paid  and  ninety-five  percent  of  the  tax
  ultimately determined to be due. In addition, this  penalty  shall  bear
  interest  at  the rate set forth in paragraph one of this subsection for
  the period from the due date until the date the penalty is paid.

    (e) Coordination with other laws. Notwithstanding  the  provisions  of
  section  one  thousand  one  hundred  twelve of this chapter, taxes paid
  pursuant to this section shall not be considered in the  calculation  of
  reciprocal  taxes  due  this  state pursuant to section one thousand one
  hundred  twelve  of  this  chapter.  Notwithstanding  the  provisions of
  subdivision (c) of section fifteen hundred eleven of the tax law,  taxes
  paid  to other states on account of the imposition of the tax imposed by
  this section shall not be included in the calculation of the tax  credit
  provided for by subdivision (c) of section fifteen hundred eleven of the
  tax law.
    (f)  Return of excess collections. In the event that total collections
  from the assessment levied pursuant to this  section  shall  exceed  the
  amount  required  to  purchase  policies  of excess or equivalent excess
  coverage for eligible participating  physicians  and  dentists  for  the
  policy year July first, nineteen hundred ninety-seven to June thirtieth,
  nineteen  hundred  ninety-eight  or  for  the  policy  year  July first,
  nineteen  hundred  ninety-eight  to  June  thirtieth,  nineteen  hundred
  ninety-nine  or  for  the  policy  year  July  first,  nineteen  hundred
  ninety-nine to June thirtieth, two thousand or for the policy year  July
  first,  two thousand to June thirtieth, two thousand one and the cost of
  administering the hospital excess liability  pool  for  such  applicable
  policy  year,  amounts in excess of such amount shall be returned to the
  companies that paid such assessment  on  a  pro  rata  basis.  Provided,
  further,  that  the  amount  required  to purchase policies of excess or
  equivalent excess coverage for  eligible  participating  physicians  and
  dentists  for  the policy year July first, nineteen hundred ninety-seven
  to June thirtieth, nineteen hundred ninety-eight, or for the policy year
  July first, nineteen hundred ninety-eight to  June  thirtieth,  nineteen
  hundred ninety-nine, or for the policy year July first, nineteen hundred
  ninety-nine to June thirtieth, two thousand, or for the policy year July
  first,  two  thousand  to  June thirtieth, two thousand one, used in the
  preceding sentence shall be reduced by the "retained amount", if any, as
  such term is defined in the following sentence. For the purposes of this
  section, the term "retained amount" shall mean any amount paid into  the
  hospital  excess  liability  pool  in  accordance with the provisions of
  section five thousand five hundred seventeen-a of this chapter which has
  not been returned to the medical malpractice insurance  association  and
  which  is  not the subject of any state or federal judicial challenge at
  the time the calculation of amounts to be returned to insurers  pursuant
  to this subsection is to be made.
    (g)  Conditional application of tax. The provisions of subsections (a)
  through (e) of this section shall apply to all premiums  written  during
  the  "event year" as such term is defined in paragraph one of subsection
  (a) of this section. Provided, however, that if the portion  of  premium
  amounts  refunded  to and received by the hospital excess liability pool
  from the medical  malpractice  insurance  association  pursuant  to  the
  requirements  of  subsection  (a)  of section five thousand five hundred
  seventeen-a of this chapter is not less than the estimated cost  of  all
  premiums  necessary  for  the  purchase  of  excess or equivalent excess
  coverage for eligible participating  physicians  and  dentists  for  the
  policy year July first, nineteen hundred ninety-seven to June thirtieth,
  nineteen  hundred  ninety-eight  or  for  the  policy  year  July first,
  nineteen  hundred  ninety-eight  to  June  thirtieth,  nineteen  hundred
  ninety-nine  or  for  the  policy  year  July  first,  nineteen  hundred
  ninety-nine to June thirtieth, two thousand or for the policy year  July
  first,  two thousand to June thirtieth, two thousand one and the cost of
  administering the hospital excess liability  pool  for  such  applicable
  policy  year,  as  certified  by the superintendent and submitted by the

  superintendent to the medical malpractice  insurance  association,  then
  the  superintendent  shall certify to the state commissioner of taxation
  and finance no later than February fifth following the calendar year  in
  which  such  return  of  premiums  is required to be made by the medical
  malpractice insurance association that the required  minimum  return  of
  premium  amounts  has  been made to and received by the pool and in such
  event the tax otherwise imposed by subsections (a) through (e)  of  this
  section  shall not be imposed and the provisions of such subsections (a)
  through (e) shall in  such  event  not  be  applied.  Provided  further,
  however,  that  if  there is a final judicial determination invalidating
  some or all of the provisions of  section  five  thousand  five  hundred
  seventeen-a  of  this  chapter  and requiring a return from the hospital
  excess liability pool of any or all of the  amounts  transferred  to  it
  pursuant  to  such  section five thousand five hundred seventeen-a, then
  the tax imposed pursuant to the provisions of  subsections  (a)  through
  (e)  of  this  section  shall  be  reinstated and the provisions of such
  subsections (a) through (e) shall in such  event  be  applied.  In  such
  event,  the  superintendent  shall  notify  the  state  commissioner  of
  taxation and finance that such  amounts  have  been  returned  from  the
  hospital  excess  liability  pool  and  the  taxes  imposed  pursuant to
  subsections (a) through (e) of this section as  modified  by  subsection
  (f)  of this section shall be due and payable within thirty days of such
  notification.
    (h) Judicial review. Notwithstanding any other law:
    (1) Application for  judicial  review  of  final  determination;  time
  limitation;  deposit; undertaking. Any final determination of the amount
  of any tax payable under subsections (a) through  (e)  of  this  section
  shall  be reviewable for error, illegality or unconstitutionality or any
  other reason whatsoever by a proceeding under article  seventy-eight  of
  the  civil practice law and rules if application therefor is made to the
  supreme court within four months after the giving of the notice of  such
  final  determination,  provided, however, that any such proceeding under
  article seventy-eight of the civil practice law and rules shall  not  be
  instituted  unless (A) the amount of any tax sought to be reviewed, with
  such interest and penalties thereon as may be provided for by such  law,
  shall  be  first deposited with the superintendent and there is filed an
  undertaking, issued by a surety company authorized to transact  business
  in  this  state  and  approved  by the superintendent as to solvency and
  responsibility, in such amount as a justice of the supreme  court  shall
  approve  to  the  effect that if such proceeding be dismissed or the tax
  confirmed the petitioner will pay all costs and charges which may accrue
  in the prosecution of such proceeding  or  (B)  at  the  option  of  the
  petitioner,  such  undertaking  may  be  in  sum sufficient to cover the
  taxes, interest and penalties stated in  such  determination,  plus  the
  costs  and charges which may accrue against it in the prosecution of the
  proceeding, in which event the  petitioner  shall  not  be  required  to
  deposit  such  taxes,  interest or penalties as a condition precedent to
  the application.
    (2) Judicial review of superintendent's denial of  timely  application
  for  refund  or  revision;  time  limitation; undertaking. Where any tax
  imposed under such subsections  (a)  through  (e)  of  this  section  is
  asserted  to  have  been  erroneously,  illegally  or unconstitutionally
  assessed or collected and application for the refund or revision thereof
  timely made to the superintendent, and  the  superintendent  shall  have
  made a determination denying such refund or revision, such determination
  shall  be  reviewable by a proceeding under article seventy-eight of the
  civil practice law and rules,  provided  (A)  that  such  proceeding  is
  instituted within four months after giving of the notice of such denial,

  (B)  that  a final determination of tax due was not previously made, and
  (C) that an undertaking is filed with the superintendent in such  amount
  and  with  such sureties as a justice of the supreme court shall approve
  to the effect that if such proceeding be dismissed or the tax confirmed,
  the  petitioner  will  pay  all costs and charges that may accrue in the
  prosecution of such proceeding.
    (3) Exception;  action  for  declaratory  judgment;  time  limitation;
  deposit;  undertaking.  Except  as provided in paragraphs one and two of
  this subsection, no  determination  or  proposed  determination  of  tax
  imposed  under  subsections  (a)  through  (e)  of this section shall be
  enjoined or reviewed by an action for declaratory  judgment,  an  action
  for  money had and received or by any action or proceeding under article
  seventy-eight of the civil practice law and  rules,  provided,  however,
  that  a  taxpayer  may  proceed  by  declaratory  judgment,  if  suit is
  instituted within thirty days after issuance of a notice of tax due  and
  the  amount  of the tax in controversy, with such interest and penalties
  thereon as may be provided for by such law, shall be deposited with  the
  superintendent  and  there  is  filed an undertaking, issued by a surety
  company authorized to transact business in this state  and  approved  by
  the  superintendent as to solvency and responsibility, in such amount as
  a justice of the supreme court shall approve to the effect that if  such
  proceeding be dismissed or the tax confirmed the petitioner will pay all
  costs and charges which may accrue in the prosecution of such proceeding
  or  at  the  option  of the petitioner, such undertaking may be in a sum
  sufficient to cover the taxes, interest and  penalties  stated  in  such
  notice,  plus  the  costs and charges which may accrue against it in the
  prosecution of the proceeding, in which event the petitioner  shall  not
  be  required to deposit such taxes, interest or penalties as a condition
  precedent to the application.
    (4) Venue for any action or  proceeding.  Venue  for  any  declaratory
  judgment action, article seventy-eight proceeding or any other action or
  proceeding  in  relation  to this section shall be in the supreme court,
  Albany county, and any such action or proceeding shall be entitled to  a
  preference both at trial and in any appeal.