N.Y. Tax Law § 1502-B — Computation of tax for captive insurance companies

§ 1502-b. Computation of tax for captive insurance companies. (a) In\nlieu of the taxes and tax surcharge imposed by sections fifteen hundred\none, fifteen hundred two-a, fifteen hundred five-a, and fifteen hundred\nten of this article, every captive insurance company licensed by the\nsuperintendent of financial services pursuant to the provisions of\narticle seventy of the insurance law, other than the metropolitan\ntransportation authority, the power authority of New York or any\nstatutory subsidiary thereof, the New York convention center operating\ncorporation or any statutory subsidiary thereof, and a public benefit\ncorporation or not-for-profit corporation formed by a city with a\npopulation of one million or more pursuant to subsection (a) of section\nseven thousand five of the insurance law, each of which is expressly\nexempt from the payment of fees, taxes or assessments whether state or\nlocal, and other than combinable captive insurance company, shall, for\nthe privilege of exercising its corporate franchise, pay a tax on (1)\nall gross direct premiums, less return premiums thereon, written on\nrisks located or resident in this state and (2) all assumed reinsurance\npremiums, less return premiums thereon, written on risks located or\nresident in this state. The rate of the tax imposed on gross direct\npremiums shall be four-tenths of one percent on all or any part of the\nfirst twenty million dollars of premiums, three-tenths of one percent on\nall or any part of the second twenty million dollars of premiums,\ntwo-tenths of one percent on all or any part of the third twenty million\ndollars of premiums, and seventy-five thousandths of one percent on each\ndollar of premiums thereafter. The rate of the tax on assumed\nreinsurance premiums shall be two hundred twenty-five thousandths of one\npercent on all or any part of the first twenty million dollars of\npremiums, one hundred and fifty thousandths of one percent on all or any\npart of the second twenty million dollars of premiums, fifty thousandths\nof one percent on all or any part of the third twenty million dollars of\npremiums and twenty-five thousandths of one percent on each dollar of\npremiums thereafter. The tax imposed by this section shall be equal to\nthe greater of (i) the sum of the tax imposed on gross direct premiums\nand the tax imposed on assumed reinsurance premiums or (ii) five\nthousand dollars.\n (b) In determining the amount of gross direct premiums or assumed\nreinsurance premiums taxable in this state, all premiums written,\nprocured or received in this state shall be deemed written on property\nor risks located or resident in this state except such premiums as are\nproperly allocated or apportioned and reported as taxable premiums or\nwhich have been used as a measure of a tax of any other state or states.\n (c) The definition of the term "premium" set forth in subdivision (c)\nof section fifteen hundred ten of this article shall apply to this\nsection. In addition, "gross direct premium" shall be determined as\nprovided in such subdivision (c). Provided, however, that the term\n"premium" shall also include any amount received by a captive insurance\ncompany as consideration for insurance provided, in the case of a pure\ncaptive insurance company, to its parents and affiliated companies, and,\nin the case of a group captive insurance company, to the industrial\ninsureds that comprise the industrial insured group. The terms "pure\ncaptive insurance company", "group captive insurance company",\n"industrial insureds" and "industrial insured group" shall have the same\nmeanings as such terms have in section seven thousand two of the\ninsurance law. The reporting of premiums for the purpose of the tax\nimposed by this section shall be on a written basis or on a paid-for\nbasis consistent with the basis required by the annual statement filed\nwith the superintendent of financial services pursuant to section seven\nthousand six of the insurance law.\n (d) The superintendent of financial services shall have the same\npower, duty and responsibility to examine the returns of captive\ninsurance companies as such superintendent has with respect to insurance\ncorporations as set forth in subdivision (e) of section fifteen hundred\nten of this article.\n (e) The credits set forth in section fifteen hundred eleven of this\narticle shall not be allowed against the tax imposed by this section.\n