Public Act 098-1169
 
SB3366 EnrolledLRB098 19763 RPS 54978 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Sections 409 and 444 as follows:
 
    (215 ILCS 5/409)  (from Ch. 73, par. 1021)
    Sec. 409. Annual privilege tax payable by companies.
    (1) As of January 1, 1999 for all health maintenance
organization premiums written; as of July 1, 1998 for all
premiums written as accident and health business, voluntary
health service plan business, dental service plan business, or
limited health service organization business; and as of January
1, 1998 for all other types of insurance premiums written,
every company doing any form of insurance business in this
State, including, but not limited to, every risk retention
group, and excluding all fraternal benefit societies, all farm
mutual companies, all religious charitable risk pooling
trusts, and excluding all statutory residual market and special
purpose entities in which companies are statutorily required to
participate, whether incorporated or otherwise, shall pay, for
the privilege of doing business in this State, to the Director
for the State treasury a State tax equal to 0.5% of the net
taxable premium written, together with any amounts due under
Section 444 of this Code, except that the tax to be paid on any
premium derived from any accident and health insurance or on
any insurance business written by any company operating as a
health maintenance organization, voluntary health service
plan, dental service plan, or limited health service
organization shall be equal to 0.4% of such net taxable premium
written, together with any amounts due under Section 444. Upon
the failure of any company to pay any such tax due, the
Director may, by order, revoke or suspend the company's
certificate of authority after giving 20 days written notice to
the company, or commence proceedings for the suspension of
business in this State under the procedures set forth by
Section 401.1 of this Code. The gross taxable premium written
shall be the gross amount of premiums received on direct
business during the calendar year on contracts covering risks
in this State, except premiums on annuities, premiums on which
State premium taxes are prohibited by federal law, premiums
paid by the State for health care coverage for Medicaid
eligible insureds as described in Section 5-2 of the Illinois
Public Aid Code, premiums paid for health care services
included as an element of tuition charges at any university or
college owned and operated by the State of Illinois, premiums
on group insurance contracts under the State Employees Group
Insurance Act of 1971, and except premiums for deferred
compensation plans for employees of the State, units of local
government, or school districts. The net taxable premium shall
be the gross taxable premium written reduced only by the
following:
        (a) the amount of premiums returned thereon which shall
    be limited to premiums returned during the same preceding
    calendar year and shall not include the return of cash
    surrender values or death benefits on life policies
    including annuities;
        (b) dividends on such direct business that have been
    paid in cash, applied in reduction of premiums or left to
    accumulate to the credit of policyholders or annuitants. In
    the case of life insurance, no deduction shall be made for
    the payment of deferred dividends paid in cash to
    policyholders on maturing policies; dividends left to
    accumulate to the credit of policyholders or annuitants
    shall be included as gross taxable premium written when
    such dividend accumulations are applied to purchase
    paid-up insurance or to shorten the endowment or premium
    paying period.
    (2) The annual privilege tax payment due from a company
under subsection (4) of this Section may be reduced by: (a) the
excess amount, if any, by which the aggregate income taxes paid
by the company, on a cash basis, for the preceding calendar
year under Sections 601 and 803 subsections (a) through (d) of
Section 201 of the Illinois Income Tax Act exceed 1.5% of the
company's net taxable premium written for that prior calendar
year, as determined under subsection (1) of this Section; and
(b) the amount of any fire department taxes paid by the company
during the preceding calendar year under Section 11-10-1 of the
Illinois Municipal Code. Any deductible amount or offset
allowed under items (a) and (b) of this subsection for any
calendar year will not be allowed as a deduction or offset
against the company's privilege tax liability for any other
taxing period or calendar year.
    (3) If a company survives or was formed by a merger,
consolidation, reorganization, or reincorporation, the
premiums received and amounts returned or paid by all companies
party to the merger, consolidation, reorganization, or
reincorporation shall, for purposes of determining the amount
of the tax imposed by this Section, be regarded as received,
returned, or paid by the surviving or new company.
    (4)(a) All companies subject to the provisions of this
Section shall make an annual return for the preceding calendar
year on or before March 15 setting forth such information on
such forms as the Director may reasonably require. Payments of
quarterly installments of the taxpayer's total estimated tax
for the current calendar year shall be due on or before April
15, June 15, September 15, and December 15 of such year, except
that all companies transacting insurance in this State whose
annual tax for the immediately preceding calendar year was less
than $5,000 shall make only an annual return. Failure of a
company to make the annual payment, or to make the quarterly
payments, if required, of at least 25% of either (i) the total
tax paid during the previous calendar year or (ii) 80% of the
actual tax for the current calendar year shall subject it to
the penalty provisions set forth in Section 412 of this Code.
    (b) Notwithstanding the foregoing provisions, no annual
return shall be required or made on March 15, 1998, under this
subsection. For the calendar year 1998:
        (i) each health maintenance organization shall have no
    estimated tax installments;
        (ii) all companies subject to the tax as of July 1,
    1998 as set forth in subsection (1) shall have estimated
    tax installments due on September 15 and December 15 of
    1998 which installments shall each amount to no less than
    one-half of 80% of the actual tax on its net taxable
    premium written during the period July 1, 1998, through
    December 31, 1998; and
        (iii) all other companies shall have estimated tax
    installments due on June 15, September 15, and December 15
    of 1998 which installments shall each amount to no less
    than one-third of 80% of the actual tax on its net taxable
    premium written during the calendar year 1998.
    In the year 1999 and thereafter all companies shall make
annual and quarterly installments of their estimated tax as
provided by paragraph (a) of this subsection.
    (5) In addition to the authority specifically granted under
Article XXV of this Code, the Director shall have such
authority to adopt rules and establish forms as may be
reasonably necessary for purposes of determining the
allocation of Illinois corporate income taxes paid under
subsections (a) through (d) of Section 201 of the Illinois
Income Tax Act amongst members of a business group that files
an Illinois corporate income tax return on a unitary basis, for
purposes of regulating the amendment of tax returns, for
purposes of defining terms, and for purposes of enforcing the
provisions of Article XXV of this Code. The Director shall also
have authority to defer, waive, or abate the tax imposed by
this Section if in his opinion the company's solvency and
ability to meet its insured obligations would be immediately
threatened by payment of the tax due.
    (6) This Section is subject to the provisions of Section 10
of the New Markets Development Program Act.
(Source: P.A. 97-813, eff. 7-13-12.)
 
    (215 ILCS 5/444)  (from Ch. 73, par. 1056)
    Sec. 444. Retaliation.
    (1) Whenever the existing or future laws of any other state
or country shall require of companies incorporated or organized
under the laws of this State as a condition precedent to their
doing business in such other state or country, compliance with
laws, rules, regulations, and prohibitions more onerous or
burdensome than the rules and regulations imposed by this State
on foreign or alien companies, or shall require any deposit of
securities or other obligations in such state or country, for
the protection of policyholders or otherwise or require of such
companies or agents thereof or brokers the payment of
penalties, fees, charges, or taxes greater than the penalties,
fees, charges, or taxes required in the aggregate for like
purposes by this Code or any other law of this State, of
foreign or alien companies, agents thereof or brokers, then
such laws, rules, regulations, and prohibitions of said other
state or country shall apply to companies incorporated or
organized under the laws of such state or country doing
business in this State, and all such companies, agents thereof,
or brokers doing business in this State, shall be required to
make deposits, pay penalties, fees, charges, and taxes, in
amounts equal to those required in the aggregate for like
purposes of Illinois companies doing business in such state or
country, agents thereof or brokers. Whenever any other state or
country shall refuse to permit any insurance company
incorporated or organized under the laws of this State to
transact business according to its usual plan in such other
state or country, the director may, if satisfied that such
company of this State is solvent, properly managed, and can
operate legally under the laws of such other state or country,
forthwith suspend or cancel the license of every insurance
company doing business in this State which is incorporated or
organized under the laws of such other state or country to the
extent that it insures in this State against any of the risks
or hazards which are sought to be insured against by the
company of this State in such other state or country.
    (2) The provisions of this Section shall not apply to
residual market or special purpose assessments or guaranty fund
or guaranty association assessments, both under the laws of
this State and under the laws of any other state or country,
and any tax offset or credit for any such assessment shall, for
purposes of this Section, be treated as a tax paid both under
the laws of this State and under the laws of any other state or
country.
    (3) The terms "penalties", "fees", "charges", and "taxes"
in subsection (1) of this Section shall include: the penalties,
fees, charges, and taxes collected on a cash basis under State
law and referenced within Article XXV exclusive of any items
referenced by subsection (2) of this Section, but including any
tax offset allowed under Section 531.13 of this Code; the
aggregate Illinois corporate income taxes paid imposed under
Sections 601 and 803 subsections (a) through (d) of Section 201
of the Illinois Income Tax Act during the calendar year for
which the retaliatory tax calculation is being made, less the
recapture of any Illinois corporate income tax cash refunds to
the extent that the amount of tax refunded was reported as part
of the Illinois basis in the calculation of the retaliatory tax
for a prior tax year, provided that such recaptured refund
shall not exceed the amount necessary for equivalence of the
Illinois basis with the state of incorporation basis in such
tax year, and after any tax offset allowed under Section 531.13
of this Code; income or personal property taxes imposed by
other states or countries; penalties, fees, charges, and taxes
of other states or countries imposed for purposes like those of
the penalties, fees, charges, and taxes specified in Article
XXV of this Code exclusive of any item referenced in subsection
(2) of this Section; and any penalties, fees, charges, and
taxes required as a franchise, privilege, or licensing tax for
conducting the business of insurance whether calculated as a
percentage of income, gross receipts, premium, or otherwise.
    (4) Nothing contained in this Section or Section 409 or
Section 444.1 is intended to authorize or expand any power of
local governmental units or municipalities to impose taxes,
fees, or charges.
    (5) This Section is subject to the provisions of Section 10
of the New Markets Development Program Act.
(Source: P.A. 95-1024, eff. 12-31-08.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.