2023 District of Columbia Code › Title 31 - Insurance and Securities › Chapter 39A - Captive Insurance Companies (2004) › Subchapter I - General › § 31–3931.12. Tax on premiums collected

§ 31–3931.12. Tax on premiums collected.
(a) Except as otherwise provided in this section, a captive insurer shall pay to the District, not later than March 2 of each year, a tax at the rate of:
(1) Two hundred fifty thousandths of one percent on the first $25 million of its net direct premiums;
(2) One hundred fifty thousandths of one percent on the next $25 million of its net direct premiums; and
(3) Fifty thousandths of one percent on each additional dollar of its net direct premiums.
(a-1) A captive insurer organized as a risk retention group, as defined in § 31-4101(12), shall pay to the District, not later than March 2 of each year, a tax at the rate of:
(1) Thirty-eight hundredths of 1% on the first $20 million of its total net direct premiums;
(2) Twenty-five hundredths of 1% on the next $20 million of its total net direct premiums; and
(3) Eighteen hundredths of 1% on each additional dollar of its total net direct premiums.
(b)(1) Except as otherwise provided in this section, a captive insurer shall pay to the District, not later than March 2 of each year, a tax at the rate of:
(A) Two hundred twenty-five thousandths of one percent on the first $25 million of revenue from assumed reinsurance premiums;
(B) One hundred fifty thousandths of one percent on the next $25 million of revenue from assumed reinsurance premiums; and
(C) Twenty-five thousandths of one percent on each additional dollar of revenue from assumed reinsurance premiums.
(2) The tax on reinsurance premiums pursuant to this subsection shall not be levied on premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection (a) of this section. A captive insurer shall not pay any reinsurance premium tax pursuant to this subsection on revenue related to the receipt of assets by the captive insurer in exchange for the assumption of loss reserves and other liabilities of another insurer that is under common ownership and control with the captive insurer, if the transaction is part of a plan to discontinue the operation of the other insurer and the intent of the parties to the transaction is to renew or maintain such business with the captive insurer.
(c) If the sum of the taxes to be paid by a captive insurer, other than a risk retention group licensed as an association captive insurer, calculated pursuant to subsections (a) and (b) of this section is less than $7,500 in any given year, the captive insurer shall pay a minimum tax of $7,500 for the year.
(d) If the sum of the taxes to be paid by a risk retention group, licensed as an association captive insurer, calculated pursuant to subsections (a-1) and (b) of this section is less than $15,000 in any given year, the captive insurer shall pay a minimum tax of $15,000 for the year.
(e) The total tax paid by a captive insurer shall not exceed $100,000 in any year.
(f) In the case of a branch captive insurer, the tax provided for in this section shall apply only to the branch business of the branch captive insurer.
(g) In the case of annuity business, the tax provided for in this section shall not apply.
(h) Notwithstanding any specific statute to the contrary and except as otherwise provided in this subsection, the tax provided for by this section shall constitute all the taxes collectible pursuant to the laws of the District from a captive insurer, and no occupation tax or other taxes shall be levied or collected from a captive insurer by the District, except for real property taxes pursuant to Chapter 8 of Title 47 or personal property taxes pursuant to subchapter II of Chapter 15 of Title 47.
(i) A captive insurer that is issued a certificate of authority during the last quarter of the calendar year may file a written request with the Commissioner for a reduction in the minimum premium tax obligation calculated pursuant to subsections (c) and (d) of this section. The Commissioner may grant the a [sic] request pursuant to an appropriate methodology adopted by rule.
(j) The tax provided for in this section shall be calculated on an annual basis, notwithstanding policies, contracts, insurance, or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax obligation under this section.
(k) One hundred percent of the revenues collected from the tax imposed pursuant to this section shall be credited to the account for the regulation and supervision of captive insurers created by § 31-1202(BB).
(l) Repealed.
(Mar. 17, 2005, D.C. Law 15-262, § 13, 52 DCR 1205; Apr. 7, 2006, D.C. Law 16-91, § 102(b), 52 DCR 10637; Mar. 2, 2007, D.C. Law 16-191, § 54(c), 53 DCR 6794; Aug. 16, 2008, D.C. Law 17-219, § 2014, 55 DCR 7598.)
Section References
This section is referenced in § 31-3931.13 and § 31-3932.03.
Effect of Amendments
D.C. Law 16-91, in subsec. (k), validated previously made technical corrections.
D.C. Law 16-191, in subsec. (k), validated a previously made technical correction.
D.C. Law 17-219 added subsec. (a-1); in subsec. (d), substituted “subsections (a-1) and (b)” for “subsections (a) and (b)” and substituted “$15,000” for “$10,000”; and repealed subsec. (l), which had read as follows: “(l) In determining the amount of premium taxes payable under this section, any insurance contract entered into by a captive insurance company issued a certificate of authority pursuant to this chapter, regardless of the location of the risk or the domicile of the purchaser, shall be subject to the payment of premium taxes on that transaction to the District of Columbia; provided, that upon presentation of evidence that another jurisdiction has claimed, and the company has paid, premium taxes to that jurisdiction on the same transaction, the company may credit the amount paid to the other jurisdiction against premium taxes owed to the District of Columbia.”
Emergency Legislation
For temporary (90 day) addition of section, see § 13 of Captive Insurance Company Emergency Act of 2004 (D.C. Act 15-640, November 30, 2004, 52 DCR 1238).
Short Title
Short title: Section 2013 of D.C. Law 17-219 provided that subtitle F of title II of the act may be cited as the “Captive Insurance Company Adjustment Amendment Act of 2008”.
Editor's Notes
Section 2015 of D.C. Law 17-219 provided that this subtitle shall apply as of January 1, 2008.