THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY D. WHITE, STACK, ERICKSON AND RAFFERTY, JUNE 6, 2011

REFERRED TO BANKING AND INSURANCE, JUNE 6, 2011  

AN ACT

Amending the act of July 6, 1917 (P.L.723, No.262), entitled "An

act imposing a tax on premiums of insurance and reinsurance

in foreign insurance companies and associations not

registered in this Commonwealth; providing the method of

collection of such tax, and imposing penalties," further

providing for tax on contracts with unauthorized companies

and deductions.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1 of the act of July 6, 1917 (P.L.723,

No.262), entitled "An act imposing a tax on premiums of

insurance and reinsurance in foreign insurance companies and

associations not registered in this Commonwealth; providing the

method of collection of such tax, and imposing penalties" is

amended to read:

Section 1.  (a)  (1)  Be it enacted, &c., That whenever any

person, corporation, copartnership, or association enters into

any contract of insurance or reinsurance of any kind with any

insurance company or association of another [State] state or of

a foreign country, not registered or entitled to do business in

this Commonwealth, such person, corporation, copartnership, or

association shall, at the time of making such contracts and at

the time of making any periodical payment, deduct from all

premiums on such insurance or reinsurance a per centum thereof

equal to the per centum tax imposed on the premiums of insurance

companies and associations of other [State] state and of foreign

countries that are registered and entitled to do business in

this Commonwealth, and shall forthwith pay such amount into the

State Treasury.

(2)  For policies placed after the effective date of this

provision, the premium taxes provided for in this section shall

be levied upon that portion of the premium computed in

accordance with section 1621(a) of the act of May 17, 1921

(P.L.682, No.284), known as "The Insurance Company Law of 1921."

(b)  (1)  Any person, corporation, copartnership, or

association failing to make such deduction and payment into the

State Treasury shall be liable for the amount of such tax, with

interest at the rate of twelve per centum per annum, to be

collected in the same manner as other taxes of the Commonwealth

are collected.

(2)  Within thirty days after the last day of the month in

which the insurance was procured, continued or renewed, a report

of the transaction shall be filed on forms prescribed by the

Department of Revenue. The report shall set forth the

information required of surplus lines licensees as required in

any report described in section 1621 of "The Insurance Company

Law of 1921." The tax shall be paid on the date the report is

due as provided in this section. The insured shall file a copy

of the report with the Insurance Department upon its request.

(c)  A penalty shall be imposed for failure to file the

report required by this section on or before the due date in

accordance with the rules of section 403(d) of the act of March

4, 1971 (P.L.6, No.2), known as the "Tax Reform Code of 1971."

(d)  (1)  The provisions of this section, insofar as they

relate to the collection, reporting and remittance of tax for

policies placed after June 30, 2011, shall apply when this

Commonwealth is the home state of the insured.

(2)  The provisions of this section, insofar as they relate

to the imposition of tax and penalties for policies placed after

June 30, 2011, shall apply when this Commonwealth is the home

state of the insured.

(3)  As used in this subsection, the term "home state" shall

mean:

(i)  Except as provided in subparagraph (ii), with respect to

an insured:

(A)  the state in which an insured maintains its principal

place of business or, in the case of an individual, the

individual's principal residence; or

(B)  if one hundred per centum of the insured risk is located

out of the state referred to in clause (A), the state to which

the greatest percentage of the insured's taxable premium for

that insurance contract is allocated.

(ii)  If more than one insured from an affiliated group are

named insureds on a single nonadmitted insurance contract, the

term means the home state, as determined under subparagraph (i),

of the member of the affiliated group that has the largest

percentage of premium attributed to it under the insurance

contract.

Section 2.  This act shall take effect immediately.