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Sponsors
Senator · Senate District 43
No co-sponsors yet.
History
- Recommitted to rules
- Ordered to third reading cal.1393
- Committee discharged and committed to rules
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Relates to obligations for certain taxes by captive insurance companies
In Assembly Committee · Insurance · Sponsor Ronald Canestrari
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
BILL NUMBER:S7561
Title of bill
An act to amend the insurance law, in relation to obligations for certain taxes
Purpose or general idea of bill
The bill provides that certain captive insurance companies no longer in the business of insurance as of December 31, 2011 shall be treated as admitted insurance carriers for the purpose of taxation, as long as they are not considered to be overcapitalized captive insurance companies as defined in subdivision 11 of section 2 of the tax law.
Summary of specific provisions
Section 1 adds a new section 7013 to the insurance law to provide that certain captive insurance companies created pursuant to the insurance law and no longer in the business of insurance as of December 31, 2011, shall be treated as admitted insurance carriers for the purpose of taxation, as long as they are not considered to be overcapitalized captive insurance companies as that term is defined in subdivision 11 of section 2 of the tax law. Section 2 provides for an immediate effective date.
Justification
Since its enactment in 1997, the captive insurance article in the insurance law has fostered the development of numerous captive insurance companies in New York. Some of these carriers were found to be overcapitalized (more assets within these companies than were necessary to pay claims). This issue was address in 2009 tax law amendments by limiting the tax benefits provided to these entities. Many of the other captive insurance companies licensed in New York since 1997, however, were not overcapitalized and operated as legitimate insurance companies accepting risk, establishing appropriate premiums and paying claims out of the proceeds of these companies. For a variety of reasons, these companies are now being considered to either not be legitimate risk transfer vehicles (notwithstanding the licensing by the former Insurance Department and the payment of premium taxes and section 332 assessments to support the operation of the department) or otherwise not to be entitled to the same tax treatment of other admitted insurance carriers. This new section would clarify that these captives (which are now no longer in operation in the state) would not be subject to new and different interpretations of the tax and insurance laws as well as retroactive taxation by the state.
Prior legislative history
New bill.
Fiscal implications
The objective of this legislation is that such tax liabilities were not due and owing by the affected captive insurance companies, assuming they are not overcapitalized captives and therefore subject to the aforementioned provision of tax law, with no revenue to the state expected.
Therefore, there is no negative fiscal impact to the state. The application of the legislation to discontinued captives assures that this is a closed group and no captive still operating will be covered by this legislation.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.