Court Opinion

ID: 9651332
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:14:30.561966+00
Date Added: 2024-06-11T18:12:32.165167
License: Public Domain

DISSENTING OPINION BY
Judge PELLEGRINI.
The central issue in this appeal is whether an insurer is entitled to a tax credit against its gross premiums and annuity considerations tax (Annuity Considerations Act) liability for annuity assessments paid *923under the Insurance Company Law of 1921 (Guaranty Act).1 Because I believe that the plain language of the statute precludes a tax credit for annuity assessments, I respectfully dissent.
The Pennsylvania Life and Health Insurance Guaranty Association (Association) was created by the Guaranty Act to protect policyholders when insurance companies become unable to pay their life, accident or health insurance or annuity obligations due to insolvency or impairment. To provide this protection, the Association is authorized to issue assessments against solvent insurers to the extent that they sell the type of insurance of the now insolvent insurers. The Association sets the amount of the assessments by determining the solvent insurer’s proportionate share of business in the Commonwealth over the previous three calendar years. The Guaranty Act allows insurers to recover assessments they have paid to the Association by requesting a credit against their tax liability under the Annuity Considerations Act. 40 P.S. § 991.1711(a). However, the Guaranty Act limits this tax credit to a proportionate part of the assessments as follows:
The proportionate part of an assessment which may be offset against a member company’s premium tax liability to the Commonwealth shall be determined according to a fraction of which the denominator is the total premiums received by the company during the calendar year immediately preceding the year in which the assessment is paid and the numerator is that portion of the premiums received during such year on account of policies of life or health and accident insurance in which the premium rates are guaranteed during the continuance of the respective policies without a right exercisable by the company to increase said premium rates.
40 P.S. § 991.1711(b). (Emphasis added).
The majority holds that this statutory language is ambiguous and resorts to legislative intent to determine whether insurers are entitled to tax credits for their annuity assessments. However, the statutory language above is clear and unambiguous. It does not include taxable and nontaxable annuities in the computation of credits for assessments paid. Instead, it distinguishes between the types of accounts which are entitled to a tax credit by limiting the numerator of the proportionate part factor to only “that portion of the premiums received during such year on account of policies of life or health and accident insurance.” 40 P.S. § 991.1711(b). If the General Assembly had intended for insurers to be able to recover assessments on annuities, they would have specifically included annuities in the numerator of the proportionate part factor. The majority’s holding, in effect, rewrites this section of the Guaranty Act by inserting annuity assessments into the numerator of the proportionate part factor.
Because taxable and/or non-taxable annuity premiums are not contained within the plain language of the statute, insurers are not entitled to a tax credit for annuity assessments under the Guaranty Act. For this reason, I would affirm the order of the Board and respectfully dissent.
President Judge LEADBETTER, joins.

. Act of May 17, 1921, P.L. 682, added by Section 19 of the Act of December 18, 1992, P.L. 1519, as amended, 40 P.S. §§ 991.1701-991.1718.