2023 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,  the  power  authority  of  New  York  or any
statutory subsidiary  thereof,  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.