HOUSE OF REPRESENTATIVES |
H.B. NO. |
2851 |
TWENTY-FIFTH LEGISLATURE, 2010 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to temporarily increase insurance premium tax rates.
SECTION 2. Section 431:7-202, Hawaii Revised Statutes, is amended by amending subsections (a), (b), (c), and (d) to read as follows:
"(a) Each authorized insurer, except with
respect to all life insurance contracts, ocean marine insurance contracts, and
real property title insurance contracts, shall pay to the director of finance
through the commissioner a tax of [4.265]
per cent on the gross premiums written from all risks or property resident, situated,
or located within this [State,] state, during the year ending on
the preceding December 31, less return premiums (but not including dividends
paid or credited to policyholders), and less any reinsurance accepted (the tax
upon such business being payable by the direct writing insurer).
All premiums written, procured, or received in
the [State] state shall be presumed to have been from risks or
property resident, situated, or located within the [State.] state.
This presumption may be rebutted as to any premium by:
(1) [By showing] Showing that it has
been properly allocated or apportioned and reported as a taxable premium of
another state or other appropriate taxing authority; or
(2) [By facts] Facts as to the
residence, situation, or location of the risks or property, conclusively
showing the nontaxability of the premium.
(b) Each authorized insurer, with respect to
life insurance contracts[,] entered into before July 1, 2010,
shall pay to the director of finance through the commissioner a tax of 2.75 per
cent on the gross premiums received from all risks resident within this [State,]
state, during the year ending on the preceding December 31, less return
premiums, dividends paid or credited to policyholders, and reinsurance accepted
(the tax upon such business being payable by the direct writing insurer).
Each authorized insurer, with respect to life insurance contracts entered into on or after July 1, 2010, shall pay to the director of finance through the commissioner a tax of per cent on the gross premiums received from all risks resident within this state, during the year ending on the preceding December 31, less return premiums, dividends paid or credited to policyholders, and reinsurance accepted (the tax upon such business being payable by the direct writing insurer).
The tax also shall apply to premiums for
insurance written on individuals residing outside the [State] state
unless the direct writing insurer shall show the payment of a comparable tax to
another appropriate taxing authority. Such showing may be required as to any
premium written, procured, or received in the [State.] state.
(c) Each authorized insurer shall, with
respect to all ocean marine insurance contracts written within the [State,]
state, during the year ending on the preceding December 31, pay to the
director of finance through the commissioner a tax of [.8775]
per cent on its gross underwriting profit. The gross underwriting profit shall
be ascertained by deducting from the net premiums (i.e., gross premiums less
all return premiums and premiums for reinsurance ceded) on such ocean marine
insurance contracts, the net losses paid (i.e., gross losses paid less salvage
and recoveries on reinsurance ceded) during such year under such contracts. In
the case of an insurer issuing participating contracts, the gross underwriting
profit shall not include, for computation of the tax prescribed by this
subsection, the amount refunded, or paid as participation dividends, by such
insurer to the holders of such contracts.
(d) Each authorized insurer, with respect to
real property title insurance contracts written on real property situated
within this [State] state during the year ending on the preceding
December 31, shall pay to the director of finance through the commissioner a
tax of [4.265] per cent of the
amount of the risk premium actually received by the authorized insurer for the
provision of such insurance. The amount of the risk premium received by the
authorized insurer for the provision of real property title insurance shall be
an amount equal to the amount actually received by the authorized insurer
solely for the provision of real property title insurance coverage in
accordance with the underwriting agreement or contract between the authorized
insurer and the underwritten title company."
SECTION 3. Section 431:8-205, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) Gross premiums charged for the
insurance, less any return premiums, are subject to a tax at the rate of [4.68]
per cent. At the time of filing the
report required in subsection (b), the insured shall pay the tax to the
commissioner.
As used in this subsection, "gross
premiums" [mean] means the amount of the policy or coverage
premium charged by the insurer in consideration for the insurance contract.
Any charges for policy, survey, inspection, service, or similar fees or other
charges added by the broker shall not be considered part of gross
premiums."
SECTION 4. Section 431:8-315, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) On or before March 15 of each year,
each surplus lines broker shall pay to the director of finance, through the
commissioner, a premium tax on surplus lines insurance transacted by the broker
during the preceding calendar year. The tax shall be in the amount of [4.68]
per cent of gross premiums, less return
premiums, on taxable surplus lines insurance.
As used in this subsection, "gross
premiums" [mean] means the amount of the policy or coverage
premium charged by the insurer in consideration for the insurance contract.
Any charges for policy, survey, inspection, service, or similar fees or other
charges added by the broker shall not be considered part of gross premiums."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2010, and shall be repealed on June 30, 2015; provided that sections 431:7-202(a) through (d), 431:8-205(c), and 431:8-315(a), Hawaii Revised Statutes, as amended by this Act shall be reenacted in the form in which they existed on the day prior to the effective date of this Act.
Report Title:
Insurance Premium Tax Rates; Increase
Description:
Increases certain insurance premium tax rates. Effective July 1, 2010, and sunsets on June 30, 2015. (HB2851 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.