Revision: May 9, 2019, 3:52 p.m.
SB 189-FN - VERSION ADOPTED BY BOTH BODIES
2019 SESSION
19-1061
01/05
SENATE BILL 189-FN
AN ACT relative to the insurance premium tax.
SPONSORS: Sen. Kahn, Dist 10
COMMITTEE: Ways and Means
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ANALYSIS
This bill establishes a flat rate on surplus lines policies for purposes of the insurance premium tax.
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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
19-1061
01/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
AN ACT relative to the insurance premium tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Insurance Premium tax; Flat Rate on Surplus Lines Policies. Amend RSA 405-B:4, II(b) to read as follows:
(b) An amount equal to 3 percent on the portion of the premiums allocated to other states or territories [on the basis of the tax rates and fees applicable to properties, risks or exposures located or to be performed outside this state], less
2 Single Home State Rate; Independently Procured Under RSA 406-B:16. Amend RSA 405-B:5, II(b) to read as follows:
(b) An amount equal to 3 percent on the portion of the premiums allocated to other states or territories [on the basis of the tax rates and fees applicable to properties, risks or exposures located or to be performed outside this state], less
3 Single Home State Rate; Independently Procured Under RSA 406-B:6, II(b). Amend RSA 405-B:6, II(b) to read as follows:
(b) An amount equal to 4 percent on the portion of the premiums allocated to other states or territories [on the basis of the tax rates and fees applicable to properties, risks or exposures located or to be performed outside this state], less
4 Effective Date. This act shall take effect January 1, 2020.
19-1061
1/11/19
SB 189-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the insurance premium tax.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
Expenditures | $0 | $0 | $0 | $0 |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ ] Other | |||
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METHODOLOGY:
This bill proposes that the premium tax levied on non-admitted insurance with multi-state risks and New Hampshire is the home state will be a flat premium tax rate. This changes current law which calculates the tax levied based the portion of the premium allocated to other states or territories on the basis of the taxes and fees applicable to the properties, risks or exposures located or to be performed outside this state. The table below depicts the net change in revenue due to the changes in this bill:
Fiscal Year | Aggregate Taxable Premium (Thousands) | Premium Tax Collected Under Current Law (Thousands) | Flat 3% Premium Tax Rate* Under Proposed Change to Law (Thousands) | Change in Revenue (Thousands) |
FY 2018 | $149,851.22 | $4,513.45 | $4,495.54 | ($17.91) |
FY 2017 | $105,056.41 | $3,113.52 | $3,151.69 | $38.17 |
FY 2016 | $93,616.82 | $2,785.19 | $2,808.51 | $23.32 |
FY 2015 | $92,880.40 | $2,777.50 | $2,786.41 | $8.91 |
FY 2014 | $81,355.93 | $2,478.42 | $2,440.68 | ($37.74) |
Five-Year Average | $104,552.16 | $3,133.62 | $3,136.57 | $2.95 |
*The Insurance Department only included the 3% tax in their estimate, since the Department has not had any independently procured insurance that involves a multi-state policy filed with the Department, which would be subjected to the 4% flat tax in this bill.
While the 5-year average change in net revenue due to the changes in this bill is approximately an increase of $2,950 in revenue, had this bill been effective over that 5-year period, change in net revenue would have been as low as a decrease of $37,740 and as high as an increase of $38,170.
AGENCIES CONTACTED:
Insurance Department