By Montford S.B. No. 641
74R4527 CBH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to administration and collection of certain insurance
1-3 taxes.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 12, Article 1.14-1, Insurance Code, as
1-6 amended by Section 3.05, Chapter 685, and Section 7, Chapter 999,
1-7 Acts of the 73rd Legislature, Regular Session, 1993, is re-enacted
1-8 to reconcile the amendments made by those acts and amended to read
1-9 as follows:
1-10 Sec. 12. Independently procured insurance tax. (a) Every
1-11 insured who procures <or causes to be procured or continues or
1-12 renews> insurance in accordance with Section 2(b)4 of this Article
1-13 must <with any unauthorized insurer, or any insured or self-insurer
1-14 who so procures or continues excess loss, catastrophe or other
1-15 insurance, upon a subject of insurance resident, located or to be
1-16 performed within this state, other than insurance procured through
1-17 a surplus lines agent pursuant to the surplus lines law of this
1-18 state shall, within 60 days after the date such insurance was so
1-19 procured, continued or renewed or before a date prescribed by the
1-20 comptroller,> file a report <of the same> with the comptroller and
1-21 pay an independently procured insurance tax of 4.85 percent <in
1-22 writing and upon forms designated by the comptroller and furnished
1-23 to such an insured upon request. The report shall show the name
1-24 and address of the insured or insureds, name and address of the
2-1 insurer, the subject of the insurance, a general description of the
2-2 coverage, the amount of premium currently charged therefor, and
2-3 such additional pertinent information as is reasonably requested by
2-4 the comptroller>.
2-5 (b) A report must be filed with the comptroller within 60
2-6 days after the date the insurance was independently procured or
2-7 before a date prescribed by the comptroller. The report must be
2-8 made in writing on forms provided by the comptroller. The report
2-9 must contain the name and address of the insured or insureds, the
2-10 name and address of the insurer, the subject of the insurance, a
2-11 general description of the coverage, the amount of premium charged,
2-12 and any additional information which the comptroller requests.
2-13 (c) The report shall be filed and any tax due shall be paid
2-14 by the insured or by any other person designated by the insured.
2-15 <There is hereby levied upon the obligation, chose in action, or
2-16 right represented by the premium charged for such insurance, a
2-17 premium receipts tax of 3.85 percent of gross premiums charged for
2-18 such insurance. The term "premium" shall include all premiums,
2-19 membership fees, assessments, dues and any other consideration for
2-20 insurance. Such tax shall be in lieu of all other insurance taxes.
2-21 The insured shall, before March 1 next succeeding the calendar year
2-22 in which the insurance was so procured, continued or renewed or
2-23 another date prescribed by the comptroller, pay the amount of the
2-24 tax to the comptroller, on a form prescribed by the comptroller.
2-25 In event of cancellation and rewriting of any such insurance
2-26 contract the additional premium for premium receipts tax purposes
2-27 shall be the premium in excess of the unearned premium of the
3-1 canceled insurance contract.>
3-2 (d) If a policy covers risks or exposures only partially in
3-3 this state, the tax payable shall be computed on the portions of
3-4 the premium which are properly allocated <allocable> to the risks
3-5 or exposures located in this state. In determining the amount of
3-6 premiums taxable in this state, all premiums written, procured or
3-7 received in this state and all premiums on policies negotiated in
3-8 this state shall be deemed written on property or risks located or
3-9 resident in this state, except such premiums as are properly
3-10 allocated or apportioned with tax due and reported to <and reported
3-11 as taxable premiums of> any other state or states. Premiums that
3-12 are properly allocated to any other state or states that are
3-13 specifically exempt from taxation under the regulations of that
3-14 state or states are not taxable in this state. Premiums on risks
3-15 or exposures which are properly allocated to federal waters,
3-16 international waters or under the jurisdiction of a foreign
3-17 government shall not be taxable.
3-18 (e) If the insured fails to withhold from the premium the
3-19 amount of tax herein levied, the insured shall be liable for the
3-20 amount thereof and shall pay the same to the comptroller within the
3-21 time stated in Paragraph (c). If the tax prescribed by this
3-22 subsection is not paid within the time stated in Paragraph (c),
3-23 Subtitles A and B, Title 2, Tax Code, <and their subsequent
3-24 amendments,> apply.
3-25 (f) <(g)> This section shall not be construed or deemed to
3-26 abrogate or modify any provision of this Article. This section
3-27 does not apply as to individual life or individual disability
4-1 insurance.
4-2 SECTION 2. Section 12(a), Article 1.14-2, Insurance Code, is
4-3 amended to read as follows:
4-4 (a) The premiums charged for surplus lines insurance are
4-5 subject to a premium receipts tax of 4.85 percent of gross premiums
4-6 charged for such insurance. The term premium includes all
4-7 premiums, membership fees, assessments, dues or any other
4-8 consideration for insurance. Such tax shall be in lieu of all
4-9 other insurance taxes. The surplus lines agent shall collect from
4-10 the insured the amount of the tax at the time of delivery of the
4-11 cover note, certificate of insurance, policy or other initial
4-12 confirmation of insurance, in addition to the full amount of the
4-13 gross premium charged by the insurer for the insurance. No agent
4-14 shall absorb such tax nor shall any agent, as an inducement for
4-15 insurance or for any other reason, rebate all or any part of such
4-16 tax or his commission. The surplus lines agent shall report to the
4-17 comptroller on March 1 <within 30 days from the 1st day of January
4-18 and July> of each year the amount of gross premiums received <paid>
4-19 for such insurance placed through eligible surplus lines during the
4-20 calendar year ending on the preceding December 31 as <him in
4-21 nonlicensed insurers, and shall pay to the comptroller the tax>
4-22 provided for by this Article. If a surplus lines policy covers
4-23 risks or exposures only partially in this state, the tax payable
4-24 shall be computed on the portions of the premium which are properly
4-25 allocated <allocable> to the risks or exposures located in this
4-26 state. In determining the amount of premiums taxable in this
4-27 state, all premiums written, procured, or received in this state
5-1 and all premiums on policies negotiated in this state shall be
5-2 deemed written on property or risks located or resident in this
5-3 state, except such premiums as are properly allocated or
5-4 apportioned with tax due and reported to <and reported as premiums
5-5 which may be subject to taxation by> any other state or states <or
5-6 by a foreign jurisdiction>. Premiums that are properly allocated
5-7 to any other state or states that are specifically exempt from
5-8 taxation under the regulations of that state or states are not
5-9 taxable in this state. Premiums on risks or exposures which are
5-10 properly allocated to federal waters, international waters or under
5-11 the jurisdiction of a foreign government shall not be taxable by
5-12 this state. In event of cancellation and rewriting of any surplus
5-13 lines insurance contract the additional premium for premium
5-14 receipts tax purposes shall be the premium in excess of the
5-15 unearned premium of the canceled insurance contract.
5-16 SECTION 3. Section 5, Article 4.10, Insurance Code, is
5-17 amended to read as follows:
5-18 Sec. 5. GROSS PREMIUM RECEIPTS DEFINED. Gross premium
5-19 receipts referred to herein are the total gross amount of premiums
5-20 actually written and billed during <received for> the taxable year
5-21 on each and every kind of insurance or risk written upon property
5-22 or risks located in the State of Texas (except premium receipts
5-23 under Section 2), except premiums actually written and billed by
5-24 <received from> other licensed companies for reinsurance, less
5-25 return premiums and dividends paid policyholders with no deduction
5-26 for premiums paid for reinsurance.
5-27 SECTION 4. Section 2(c), Article 4.11, Insurance Code, is
6-1 amended to read as follows:
6-2 (c) "Gross premiums" are the total gross amount of all
6-3 premiums, membership fees, assessments, dues, and any other
6-4 considerations for such insurance actually written and billed
6-5 <received> during the taxable year on each and every kind of such
6-6 insurance policy or contract covering persons located in the State
6-7 of Texas and arising from the types of insurance specified in
6-8 Section 1 of this article, but deducting returned premiums, any
6-9 dividends applied to purchase paid-up additions to insurance or to
6-10 shorten the endowment or premium payment period, and excluding
6-11 those premiums actually written and billed by <received from>
6-12 insurance carriers for reinsurance and there shall be no deduction
6-13 for premiums paid for reinsurance. For purposes of this article, a
6-14 stop-loss or excess loss insurance policy issued to a health
6-15 maintenance organization, as defined under the Texas Health
6-16 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
6-17 Code), shall be considered reinsurance. Such gross premiums shall
6-18 not include premiums paid by <received from> the Treasury of the
6-19 State of Texas or <from> the Treasury of the United States for
6-20 insurance contracted for by the state or federal government for the
6-21 purpose of providing welfare benefits to designated welfare
6-22 recipients or for insurance contracted for by the state or federal
6-23 government in accordance with or in furtherance of the provisions
6-24 of Title 2, Human Resources Code, or the Federal Social Security
6-25 Act. The gross premiums receipts so reported shall not include the
6-26 amount of premiums paid on group health, accident, and life
6-27 policies in which the group covered by the policy consists of a
7-1 single nonprofit trust established to provide coverage primarily
7-2 for municipal or county employees of this state.
7-3 SECTION 5. Article 8.21, Insurance Code, is amended to read
7-4 as follows:
7-5 Art. 8.21. FEES. The department <Board> shall charge for
7-6 filing the annual statement required by this chapter, a fee of
7-7 Twenty ($20.00) Dollars. The comptroller shall collect the fee.
7-8 SECTION 6. Section 2, Article 9.59, Insurance Code, is
7-9 amended to read as follows:
7-10 Sec. 2. PREMIUM DEFINED. In this article premium means the
7-11 total amount of premiums actually written and billed during
7-12 <received for> the taxable year on title insurance written on
7-13 property located in this state except premiums actually written and
7-14 billed by <received from> other licensed title insurance companies
7-15 for reinsurance, less return premiums paid policyholders with no
7-16 deduction for premiums paid for reinsurance.
7-17 SECTION 7. Article 16.22, Insurance Code, is amended to read
7-18 as follows:
7-19 Art. 16.22. FEES. (a) For the renewal and extension of the
7-20 granting of any charter, the department <Board> shall charge and
7-21 collect a filing fee of Ten ($10.00) Dollars and a like amount for
7-22 any amendment to the charter of any such company.
7-23 (b) The department <Board> shall charge and collect a fee of
7-24 One ($1.00) Dollar for the issuance of a certificate of authority
7-25 or renewal thereof to all companies operating under this chapter.
7-26 The department<, and for filing such annual statement required by
7-27 the Board, it> shall charge a filing fee of Twenty ($20.00) Dollars
8-1 for filing an annual statement required by the department. The
8-2 comptroller shall collect the annual statement filing fee. <Fees
8-3 collected under this article shall be deposited in the State
8-4 Treasury to the credit of the State Board of Insurance operating
8-5 fund. Article 1.31A of this code applies to fees collected under
8-6 this article.>
8-7 SECTION 8. Article 17.21, Insurance Code, is amended to read
8-8 as follows:
8-9 Art. 17.21. FEES. (a) The department <Board> shall charge
8-10 and collect a fee of One ($1.00) Dollar for the issuance of a
8-11 certificate of authority or renewal thereof to all companies
8-12 operating under this chapter.
8-13 (b) The department<, and for filing each annual statement,
8-14 it> shall charge a filing fee of Twenty ($20.00) Dollars for filing
8-15 each annual statement. The comptroller shall collect the filing
8-16 fee.
8-17 SECTION 9. Article 18.12, Insurance Code, is amended to read
8-18 as follows:
8-19 Art. 18.12. ANNUAL REPORTS. The attorneys for such
8-20 underwriters shall annually file with the department <Board of
8-21 Insurance Commissioners> a verified report of the business done by
8-22 the attorney for such underwriters during the previous year, and of
8-23 the condition of its affairs, together with such other information
8-24 as the department <Board of Insurance Commissioners> may demand;
8-25 such report shall be filed upon blanks prepared by the department
8-26 <Board> and shall cover the report of all the business of such
8-27 underwriters, wherever the same may be conducted.
9-1 SECTION 10. Section 32, Texas Health Maintenance
9-2 Organization Act (Article 20A.32, Vernon's Texas Insurance Code),
9-3 is amended by adding Subsection (a)(4) to read as follows:
9-4 (4) Notwithstanding Subsection (a)(1) of this article,
9-5 the comptroller shall collect the annual report filing fee
9-6 prescribed by Subsection (a)(1)(B) of this article.
9-7 SECTION 11. Subsection A, Article 21.46, Insurance Code, is
9-8 amended to read as follows:
9-9 A. Whenever by the laws of any other state or territory of
9-10 the United States any taxes, including income and corporate
9-11 franchise, licenses, fees, fines, penalties, deposit requirements
9-12 or other obligations, prohibitions or restrictions are imposed upon
9-13 any insurance company organized in this State and licensed and
9-14 actually doing business in such other state or territory which, in
9-15 the aggregate are in excess of the aggregate of the taxes,
9-16 including income and corporate franchise, licenses, fees, fines,
9-17 penalties, deposit requirements or other obligations, prohibitions
9-18 or restrictions directly imposed upon a similar insurance company
9-19 of such other state or territory doing business in this State, the
9-20 comptroller <State Board of Insurance> shall impose upon and
9-21 collect from any similar company of such state or territory in the
9-22 same manner and for the same purpose, the same taxes, licenses,
9-23 fees, fines, penalties, deposit requirements or other obligations,
9-24 prohibitions or restrictions; provided, however, the aggregate of
9-25 taxes, licenses, fees, fines, penalties or other obligations
9-26 imposed by this State pursuant to this Article on an insurance
9-27 company of another state or territory shall not exceed the
10-1 aggregate of such charges imposed by such other state or territory
10-2 on a similar insurance company of this State actually licensed and
10-3 doing business therein; provided, further, that wherever under any
10-4 law of this State the basic rate of taxation of any insurance
10-5 company of another state or territory is reduced if any such
10-6 insurance company has made investments in Texas securities then in
10-7 computing the aggregate Texas premium tax burdens of any such
10-8 insurance company of any other state or territory each shall for
10-9 purposes of comparison with the premium tax laws of its home state
10-10 be considered to have assumed and paid an aggregate premium tax
10-11 burden equal to the basic rate; provided, further, that for the
10-12 purpose of this Section, an alien insurer shall be deemed a company
10-13 of the State designated by it wherein it has
10-14 (a) established its principal office or agency in the
10-15 United States, or
10-16 (b) maintains the largest amount of its assets held in
10-17 trust or on deposit for the security of its policyholders or
10-18 policyholders and creditors in the United States, or
10-19 (c) in which it was admitted to do business in the
10-20 United States.
10-21 Taxes, licenses, <Licenses> and fees collected by the
10-22 comptroller <State Board of Insurance> under this Article shall be
10-23 deposited in the State Treasury to the credit of the general
10-24 revenue fund. The comptroller shall prescribe the due date for the
10-25 filing of the report and payment of the taxes, licenses, and fees
10-26 under this Article.
10-27 The provisions of this Section shall not apply to ad valorem
11-1 taxes on real or personal property or to personal income taxes.
11-2 The provisions of this Act shall not apply to a company of
11-3 any other state doing business in this State if fifteen per cent
11-4 (15%) or more of the voting stock of said company is owned by a
11-5 corporation organized under the laws of this State, and domiciled
11-6 in this State; however, the prior provisions of this Act shall
11-7 apply without exception to any and all person or persons, company
11-8 or companies, firm or firms, association or associations, group or
11-9 groups, corporation or corporations, or any insurance organization
11-10 or organizations of any kind, which did not qualify as a matter of
11-11 fact, under the exception of this paragraph, on or before January
11-12 29, 1957.
11-13 SECTION 12. Section 4(e), Article 21.54, Insurance Code, is
11-14 amended to read as follows:
11-15 (e) A filing fee not to exceed $500 as established by
11-16 commissioner regulation may be imposed for the filing of the
11-17 financial statement under Subdivision (1) of Subsection (d) of this
11-18 section. The comptroller shall collect the fee. <Fees collected
11-19 for filing the statement shall be deposited in the State Treasury
11-20 to the credit of the general revenue fund to be reallocated to the
11-21 Texas Department of Insurance operating fund.>
11-22 SECTION 13. Article 4.11A, Insurance Code, is repealed.
11-23 SECTION 14. This Act takes effect September 1, 1995, and
11-24 applies to a fee or tax that becomes due on or after that date. A
11-25 fee or tax imposed that becomes due before the effective date of
11-26 this Act is governed by the law in existence when the fee or tax
11-27 became due, and that law is continued in effect for that purpose.
12-1 SECTION 15. The importance of this legislation and the
12-2 crowded condition of the calendars in both houses create an
12-3 emergency and an imperative public necessity that the
12-4 constitutional rule requiring bills to be read on three several
12-5 days in each house be suspended, and this rule is hereby suspended.