HB507 (2009) Detail

Relative to taxes, fees, and credits under the insurance laws.


HB 507-FN – AS INTRODUCED

2009 SESSION

09-0728

01/04

HOUSE BILL 507-FN

AN ACT relative to taxes, fees, and credits under the insurance laws.

SPONSORS: Rep. Headd, Rock 3

COMMITTEE: Commerce and Consumer Affairs

ANALYSIS

This bill increases and adjusts certain insurance fees and taxes.

This bill is a request of the insurance department.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0728

01/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT relative to taxes, fees, and credits under the insurance laws.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Insurance; Fees Increased. Amend RSA 400-A:29, I and II to read as follows:

I. Certificate of authority.

(a) Application [$300] $1,000

(b) Initial certificate [$100] $500

(c) Annual renewal $100

(d) Reinstatement $ 50

(e) Amendment $ 25

II. Charter documents (other than those filed or transmitted with application for certificate of authority)

(a) For filing or transmitting articles of amendment, [$ 10] $25 domestic companies

(b) For filing or transmitting a copy of amendment to the articles of incorporation of a foreign or alien company, [$10] $35. If the amendment is filed or transmitted more than 60 days after the same has become effective in the home state, the corporation shall pay to the commissioner a penalty of [$25] $50.

2 Insurance; Continuing Education Fees. Amend RSA 400-A:29-a to read as follows:

400-A:29-a Fees for Continuing Education Course Submissions; Special Fund Established.

I. The commissioner may impose and collect reasonable application fees in amounts to be determined by the commissioner from sponsoring organizations for submissions of continuing education courses to meet educational requirements established by rule for [agents, brokers] producers, consultants, and [consultants] adjusters.

II. The fees collected by the commissioner under paragraph I shall be forwarded to the state treasurer for deposit in the continuing education advisory council reimbursement fund. Moneys in this fund shall lapse to the general fund at the close of each fiscal year. Moneys from this fund shall be used by the commissioner to pay the expenses of compensating the continuing education advisory [council] councils, within the limits of appropriations made in the operating budget for this purpose.

III. Members of the respective continuing education advisory councils shall receive $100 for each day or portion of a day spent in the discharge of their official duties and shall be reimbursed for all actual travel.

3 Insurance; Premium Tax. Amend RSA 400-A:32, I(a) to read as follows:

I.(a) Every insurer shall pay to the insurance commissioner a tax upon such net premiums, for lines of business written, as set forth in the report filed pursuant to RSA 400-A:31, I, less estimated payments made in accordance with RSA 400-A:32, II, as follows:

(1) Effective July 1, 2007, a tax of 1.75 percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, RSA 416-A:2, and RSA 401:1-a, I and II;

(2) Effective January 1, 2009, a tax of 1.50 percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, RSA 416-A:2, and RSA 401:1-a, I and II;

(3) Effective January 1, 2010, a tax of 1.25 percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, RSA 416-A:2, and RSA 401:1-a, I and II; and

(4) Effective January 1, 2011, a tax of one percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, RSA 416-A:2, and RSA 401:1-a, I and II.

(5) A tax of 2 percent for all lines of business written pursuant to RSA 401:1, IV, including, but not limited to, insurers licensed pursuant to RSA 420-A, RSA 420-B, and RSA 420-F.

4 Foreign Insurance Companies; Annual Statement; Tax. Amend RSA 405:29, I to read as follows:

I. Each licensed producer shall file with the commissioner, not later than January 31st of each year, a sworn statement of the gross premiums charged for insurance procured or placed and the gross return premiums on such insurance cancelled under such license during the year ending on December 31 next preceding, and at the time of filing such statement shall pay to the state treasurer a sum equal to [2] 3.5 percent of such gross premiums less such return premiums reported.

5 Life and Health Guaranty Association; Assessments. Amend RSA 408-B:13 to read as follows:

408-B:13 [Credits for Assessments Paid] Assessment Refunds to State.

[I. A member insurer may offset against its tax liability under RSA 400-A any assessment described in RSA 408-B:9, II(b) for the life insurance and annuity account, and for the health account for guaranteeing the performance of contractual obligations of an impaired or insolvent insurer in regard to disability income coverages only, to the extent of 20 percent of the amount of the assessment for each of the 5 calendar years following the year in which the assessment was paid. If a member insurer ceases doing business, all uncredited assessments described above may be credited against its tax liability under RSA 400-A for the year it ceases doing business.

II.] Any sums acquired by refund from the association by member insurers, as stated in RSA 408-B:9, VI, and which were previously [offset against taxes as described in paragraph I] calculated in premium rates pursuant to RSA 408-B:9, VII, shall be paid by these insurers to the state of New Hampshire in the manner required by the commissioner. The association shall notify the commissioner that refunds have been made.

6 Title Insurance Code; Laws Applicable. Amend RSA 416-A:18 to read as follows:

416-A:18 Laws Applicable.

I. In addition to the provisions of RSA 416-A, the laws governing insurance companies, except as they are inconsistent with the provisions of RSA 416-A shall apply to the business of title insurance and to title insurance companies.

II. The provisions of RSA 400-A:32 shall be applicable to title insurers.

7 Reference Deletion. Amend RSA 400-A:34, I to read as follows:

I. The provisions of RSA 400-A:31[,] and 32 [and 33] shall not apply to mutual insurance companies that operate on an assessment plan and require as a condition for granting insurance the signing of a premium deposit note by the insured, which note is given for the purpose of establishing a limit of liability to assessment, while their total receipts from policyholders is less than $10,000 per year.

8 Repeal. The following are repealed:

I. RSA 400-A:31, IV, relative to ocean marine insurance taxation.

II. RSA 400-A:33, relative to a tax on marine underwriting profits.

9 Effective Date. This act shall take effect July 1, 2009.

LBAO

09-0728

01/15/09

HB 507-FN - FISCAL NOTE

AN ACT relative to taxes, fees, and credits under the insurance laws.

FISCAL IMPACT:

      The New Hampshire Insurance Department states this bill will increase state revenues by $1,432,920 in FY 2010, $1,398,382 in FY 2011, $1,380,836 in FY 2012, and $1,382,031 in FY 2013. This bill will have no impact on county and local revenues or state, county, and local expenditures.

METHODOLOGY:

    The New Hampshire Insurance Department states this bill will increase certain insurance fees and taxes. The Department assumes the bill will be effective July 1, 2009, and that surplus lines premiums, ocean marine premiums, and company applications for licensure will remain relatively constant. Total increase in revenues is as follows:

 

FY 2010

FY 2011

FY 2012

FY 2013

Foreign Company Premium Tax

$1,260,000

$1,260,000

$1,260,000

$1,260,000

Ocean Marine Premium Tax

$ 131,145

$ 96,607

$ 79,061

$ 80,256

Certificate of Authority Application Fee

$ 41,775

$ 41,775

$ 41,775

$ 41,775

Total

$1,432,920

$1,398,382

$1,380,836

$1,382,031

    The Department estimates an increase in premium tax for foreign insurance companies from 2% to 3.5% on surplus lines written will increase revenue by $1,260,000 in FY 2010 and each year thereafter ($84,000,000 average value of surplus lines premiums written from FY 2004 to FY 2008 x 3.5% premium tax= $2,940,000, less $1,680,000 current 2% premium tax = $1,260,000).

    The Department states including ocean marine premiums under the tax schedule in RSA 400-A:32, I (a) will increase revenue as follows:

 

FY 2010

FY 2011

FY 2012

FY 2013

Ocean Marines Premiums For Half FY

$7,101,176

$7,172,694

$ 7,224,421

$7,316,865

Proposed Tax Rate 1st Half Fiscal Year

1.50%

1.25%

1.00%

1.00%

Proposed Tax Rate 2nd Half Fiscal Year

1.25%

1.00%

1.00%

1.00%

1st Half FY Premium Tax

$ 106,518

$ 89,659

$ 72,244

$ 73,169

2nd Half FY Premium Tax

$ 88,765

$ 71,727

$ 72,244

$ 73,169

FY Total

$ 195,283

$ 161,386

$144,488

$ 146,338

Less Current Ocean Marine Tax Income

$ 64,138

$ 64,779

$ 65,427

$ 66,082

Increase In Ocean Marine Tax

$ 131,145

$ 96,607

$ 79,061

$ 80,256

    This bill will increase the application fee for insurance company certification of authority from $300 to $1,000, and the fee for the initial certificate from $100 to $500. The Department anticipates $41,775 increased revenue in FY 2010 and each year thereafter from the increased fees (41 companies x $1,000 + 41 x $500 = $61,500, less $19,725 fees currently received = $41,775).

    The Department states an increase in charter document filing and transmittal fees will have a minimal impact on state revenues. The Department also states the inclusion of title insurance in tax on net premiums is a clarification of current practice, and will have no impact on state revenues.

Links

HB507 at GenCourtMobile

Action Dates

Date Body Type

Bill Text Revisions

HB507 Revision: 13452 Date: Jan. 22, 2009, midnight

Docket