2019 New York Laws
TAX - Tax
Article 33 - Franchise Taxes on Insurance Corporations
1502-B - Computation of Tax for Captive Insurance Companies.

§  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   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.