SB3366 EnrolledLRB098 19763 RPS 54978 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 409 and 444 as follows:
 
6    (215 ILCS 5/409)  (from Ch. 73, par. 1021)
7    Sec. 409. Annual privilege tax payable by companies.
8    (1) As of January 1, 1999 for all health maintenance
9organization premiums written; as of July 1, 1998 for all
10premiums written as accident and health business, voluntary
11health service plan business, dental service plan business, or
12limited health service organization business; and as of January
131, 1998 for all other types of insurance premiums written,
14every company doing any form of insurance business in this
15State, including, but not limited to, every risk retention
16group, and excluding all fraternal benefit societies, all farm
17mutual companies, all religious charitable risk pooling
18trusts, and excluding all statutory residual market and special
19purpose entities in which companies are statutorily required to
20participate, whether incorporated or otherwise, shall pay, for
21the privilege of doing business in this State, to the Director
22for the State treasury a State tax equal to 0.5% of the net
23taxable premium written, together with any amounts due under

 

 

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1Section 444 of this Code, except that the tax to be paid on any
2premium derived from any accident and health insurance or on
3any insurance business written by any company operating as a
4health maintenance organization, voluntary health service
5plan, dental service plan, or limited health service
6organization shall be equal to 0.4% of such net taxable premium
7written, together with any amounts due under Section 444. Upon
8the failure of any company to pay any such tax due, the
9Director may, by order, revoke or suspend the company's
10certificate of authority after giving 20 days written notice to
11the company, or commence proceedings for the suspension of
12business in this State under the procedures set forth by
13Section 401.1 of this Code. The gross taxable premium written
14shall be the gross amount of premiums received on direct
15business during the calendar year on contracts covering risks
16in this State, except premiums on annuities, premiums on which
17State premium taxes are prohibited by federal law, premiums
18paid by the State for health care coverage for Medicaid
19eligible insureds as described in Section 5-2 of the Illinois
20Public Aid Code, premiums paid for health care services
21included as an element of tuition charges at any university or
22college owned and operated by the State of Illinois, premiums
23on group insurance contracts under the State Employees Group
24Insurance Act of 1971, and except premiums for deferred
25compensation plans for employees of the State, units of local
26government, or school districts. The net taxable premium shall

 

 

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1be the gross taxable premium written reduced only by the
2following:
3        (a) the amount of premiums returned thereon which shall
4    be limited to premiums returned during the same preceding
5    calendar year and shall not include the return of cash
6    surrender values or death benefits on life policies
7    including annuities;
8        (b) dividends on such direct business that have been
9    paid in cash, applied in reduction of premiums or left to
10    accumulate to the credit of policyholders or annuitants. In
11    the case of life insurance, no deduction shall be made for
12    the payment of deferred dividends paid in cash to
13    policyholders on maturing policies; dividends left to
14    accumulate to the credit of policyholders or annuitants
15    shall be included as gross taxable premium written when
16    such dividend accumulations are applied to purchase
17    paid-up insurance or to shorten the endowment or premium
18    paying period.
19    (2) The annual privilege tax payment due from a company
20under subsection (4) of this Section may be reduced by: (a) the
21excess amount, if any, by which the aggregate income taxes paid
22by the company, on a cash basis, for the preceding calendar
23year under Sections 601 and 803 subsections (a) through (d) of
24Section 201 of the Illinois Income Tax Act exceed 1.5% of the
25company's net taxable premium written for that prior calendar
26year, as determined under subsection (1) of this Section; and

 

 

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1(b) the amount of any fire department taxes paid by the company
2during the preceding calendar year under Section 11-10-1 of the
3Illinois Municipal Code. Any deductible amount or offset
4allowed under items (a) and (b) of this subsection for any
5calendar year will not be allowed as a deduction or offset
6against the company's privilege tax liability for any other
7taxing period or calendar year.
8    (3) If a company survives or was formed by a merger,
9consolidation, reorganization, or reincorporation, the
10premiums received and amounts returned or paid by all companies
11party to the merger, consolidation, reorganization, or
12reincorporation shall, for purposes of determining the amount
13of the tax imposed by this Section, be regarded as received,
14returned, or paid by the surviving or new company.
15    (4)(a) All companies subject to the provisions of this
16Section shall make an annual return for the preceding calendar
17year on or before March 15 setting forth such information on
18such forms as the Director may reasonably require. Payments of
19quarterly installments of the taxpayer's total estimated tax
20for the current calendar year shall be due on or before April
2115, June 15, September 15, and December 15 of such year, except
22that all companies transacting insurance in this State whose
23annual tax for the immediately preceding calendar year was less
24than $5,000 shall make only an annual return. Failure of a
25company to make the annual payment, or to make the quarterly
26payments, if required, of at least 25% of either (i) the total

 

 

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1tax paid during the previous calendar year or (ii) 80% of the
2actual tax for the current calendar year shall subject it to
3the penalty provisions set forth in Section 412 of this Code.
4    (b) Notwithstanding the foregoing provisions, no annual
5return shall be required or made on March 15, 1998, under this
6subsection. For the calendar year 1998:
7        (i) each health maintenance organization shall have no
8    estimated tax installments;
9        (ii) all companies subject to the tax as of July 1,
10    1998 as set forth in subsection (1) shall have estimated
11    tax installments due on September 15 and December 15 of
12    1998 which installments shall each amount to no less than
13    one-half of 80% of the actual tax on its net taxable
14    premium written during the period July 1, 1998, through
15    December 31, 1998; and
16        (iii) all other companies shall have estimated tax
17    installments due on June 15, September 15, and December 15
18    of 1998 which installments shall each amount to no less
19    than one-third of 80% of the actual tax on its net taxable
20    premium written during the calendar year 1998.
21    In the year 1999 and thereafter all companies shall make
22annual and quarterly installments of their estimated tax as
23provided by paragraph (a) of this subsection.
24    (5) In addition to the authority specifically granted under
25Article XXV of this Code, the Director shall have such
26authority to adopt rules and establish forms as may be

 

 

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1reasonably necessary for purposes of determining the
2allocation of Illinois corporate income taxes paid under
3subsections (a) through (d) of Section 201 of the Illinois
4Income Tax Act amongst members of a business group that files
5an Illinois corporate income tax return on a unitary basis, for
6purposes of regulating the amendment of tax returns, for
7purposes of defining terms, and for purposes of enforcing the
8provisions of Article XXV of this Code. The Director shall also
9have authority to defer, waive, or abate the tax imposed by
10this Section if in his opinion the company's solvency and
11ability to meet its insured obligations would be immediately
12threatened by payment of the tax due.
13    (6) This Section is subject to the provisions of Section 10
14of the New Markets Development Program Act.
15(Source: P.A. 97-813, eff. 7-13-12.)
 
16    (215 ILCS 5/444)  (from Ch. 73, par. 1056)
17    Sec. 444. Retaliation.
18    (1) Whenever the existing or future laws of any other state
19or country shall require of companies incorporated or organized
20under the laws of this State as a condition precedent to their
21doing business in such other state or country, compliance with
22laws, rules, regulations, and prohibitions more onerous or
23burdensome than the rules and regulations imposed by this State
24on foreign or alien companies, or shall require any deposit of
25securities or other obligations in such state or country, for

 

 

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1the protection of policyholders or otherwise or require of such
2companies or agents thereof or brokers the payment of
3penalties, fees, charges, or taxes greater than the penalties,
4fees, charges, or taxes required in the aggregate for like
5purposes by this Code or any other law of this State, of
6foreign or alien companies, agents thereof or brokers, then
7such laws, rules, regulations, and prohibitions of said other
8state or country shall apply to companies incorporated or
9organized under the laws of such state or country doing
10business in this State, and all such companies, agents thereof,
11or brokers doing business in this State, shall be required to
12make deposits, pay penalties, fees, charges, and taxes, in
13amounts equal to those required in the aggregate for like
14purposes of Illinois companies doing business in such state or
15country, agents thereof or brokers. Whenever any other state or
16country shall refuse to permit any insurance company
17incorporated or organized under the laws of this State to
18transact business according to its usual plan in such other
19state or country, the director may, if satisfied that such
20company of this State is solvent, properly managed, and can
21operate legally under the laws of such other state or country,
22forthwith suspend or cancel the license of every insurance
23company doing business in this State which is incorporated or
24organized under the laws of such other state or country to the
25extent that it insures in this State against any of the risks
26or hazards which are sought to be insured against by the

 

 

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1company of this State in such other state or country.
2    (2) The provisions of this Section shall not apply to
3residual market or special purpose assessments or guaranty fund
4or guaranty association assessments, both under the laws of
5this State and under the laws of any other state or country,
6and any tax offset or credit for any such assessment shall, for
7purposes of this Section, be treated as a tax paid both under
8the laws of this State and under the laws of any other state or
9country.
10    (3) The terms "penalties", "fees", "charges", and "taxes"
11in subsection (1) of this Section shall include: the penalties,
12fees, charges, and taxes collected on a cash basis under State
13law and referenced within Article XXV exclusive of any items
14referenced by subsection (2) of this Section, but including any
15tax offset allowed under Section 531.13 of this Code; the
16aggregate Illinois corporate income taxes paid imposed under
17Sections 601 and 803 subsections (a) through (d) of Section 201
18of the Illinois Income Tax Act during the calendar year for
19which the retaliatory tax calculation is being made, less the
20recapture of any Illinois corporate income tax cash refunds to
21the extent that the amount of tax refunded was reported as part
22of the Illinois basis in the calculation of the retaliatory tax
23for a prior tax year, provided that such recaptured refund
24shall not exceed the amount necessary for equivalence of the
25Illinois basis with the state of incorporation basis in such
26tax year, and after any tax offset allowed under Section 531.13

 

 

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1of this Code; income or personal property taxes imposed by
2other states or countries; penalties, fees, charges, and taxes
3of other states or countries imposed for purposes like those of
4the penalties, fees, charges, and taxes specified in Article
5XXV of this Code exclusive of any item referenced in subsection
6(2) of this Section; and any penalties, fees, charges, and
7taxes required as a franchise, privilege, or licensing tax for
8conducting the business of insurance whether calculated as a
9percentage of income, gross receipts, premium, or otherwise.
10    (4) Nothing contained in this Section or Section 409 or
11Section 444.1 is intended to authorize or expand any power of
12local governmental units or municipalities to impose taxes,
13fees, or charges.
14    (5) This Section is subject to the provisions of Section 10
15of the New Markets Development Program Act.
16(Source: P.A. 95-1024, eff. 12-31-08.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.