Retaliation: A Guide to State Retaliatory Taxes, Fees ...

1 RETALIATION Guide December 2022 Enclosed is the 2022 update to the Retaliation Guide , incorporating the changes that have occurred in State laws during the past year, as reported by each State . All the pages in your book should be replaced. An arrow in the left margin indicates a change. In February 2023, the NAIC plans to release an updated second volume of the Retaliation Guide to help you identify the State tax forms used for collecting premium and Retaliatory taxes. If you have questions about the content, you should request clarification from the State contacts listed. If you have questions about the printing or distribution of copies, please contact an NAIC Customer Service Representative at (816) 783-8300 or Olivea A.

2 Myers Editor Legal Counsel Patricia E. Cook Assistant Editor Senior Paralegal The Retaliation Guide is intended to provide helpful information about Retaliatory and other taxes and assessments. The Guide is not intended to be cited as binding legal authority and does not constitute a formal legal opinion by the NAIC staff on the provisions of State law and should not be relied upon as such. Every effort has been made to provide correct and accurate summaries to assist the reader in targeting useful information. For further details, including any additional adoptions, the statutes and regulations cited should be consulted.

3 Retaliation: A Guide to State Retaliatory Taxes, Fees, Deposits and Other Requirements volume I December 2022 Accounting & ReportingInformation about statutory accounting principles and the procedures necessary for filing financial annual statements and conducting risk-based capital InformationImportant answers to common questions about auto, home, health and life insurance as well as buyer s guides on annu-ities, long-term care insurance and Medicare supplement Regulation Useful handbooks, compliance guides and reports on financial analysis, company licensing, State audit requirements and collection of NAIC model laws, regulations and guidelines; State laws on insurance topics.

4 And other reg-ulatory guidance on antifraud and consumer RegulationRegulatory and industry guidance on market-related issues, including antifraud, product filing requirements, producer licensing and market ActivitiesNAIC member directories, in-depth reporting of State regulatory activities and official historical records of NAIC na-tional meetings and other StudiesStudies, reports, handbooks and regulatory research conducted by NAIC members on a variety of insurance- related ReportsValuable and in-demand insurance industry-wide statistical data for various lines of business, including auto, home, health and life ProductsGuidance manuals, handbooks, surveys and research on a wide variety of Markets & Investment AnalysisInformation regarding portfolio values and procedures for complying with NAIC reporting Papers Relevant studies, guidance and NAIC policy positions on a variety of insurance topics.

5 1999-2022 National Association of Insurance Commissioners. All rights :978-1-64179-219-6 Printed in the United States of AmericaNo part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any storage or retrieval system, without written permission from the Executive Office444 North Capitol Street, NWSuite 700 Washington, DC 20001 Central Office1100 Walnut StreetSuite 1500 Kansas City, MO capital Markets& Investment Analysis OfficeOne New York Plaza, Suite 4210 New York, NY NAIC is the authoritative source for insurance industry information.

6 Our expert solutions support the efforts of regulators, insurers and researchers by providing detailed and comprehensive insurance information. The NAIC offers a wide range of publications in the following categories:For more information about NAIC publications, visit us at: December 2022 1991-2022 National Association of Insurance Commissioners AL-1 ALABAMA Arrow indicates an update for 2022 PREMIUM TAX Premium Tax Base: Ala. Code 27-4A-2 All amounts received as consideration for insurance contracts less returned premiums, reinsurance premiums from companies subject to premium tax, and dividends paid.

7 Annuity considerations are not included. Tax Rate: 27-4A-3 Life insurers Health and accident and health Individual life policies of $5,001 up to $25,000 will be taxed at 1%. Individual life policies of $5,000 or less, will be taxe d at Hospital, medical, surgical, or other health benefits provided to groups with less than 50 insured participants will be taxed at Hospital, medical, surgical, or other health benefits supplementary to Medicare and Medicaid or governmental employee plans are exempt from premium tax. Premium tax on insurance other than life, health and accident and health at All property and multi-peril insurance written in fire protection classes 9 & 10 at 1%.

8 Mobile homes, low value dwelling policies at 1%. Medical liability insurance at 27-31A-4 Risk retention groups , same as foreign admitted insurer Other Taxes and Assessments: 40-14a-21 to 40-14a-29 Privilege Tax The tax rate is determined by the company s total income allocated to Alabama. The amount of tax is determined by multiplying the taxpayer s net worth in Alabama by that rate. Retaliation December 2022 AL-2 1991-2022 National Association of Insurance Commissioners Other Taxes and Assessments (cont.) 11-51-120 to 11-51-122 Municipal Corporations Tax Municipal corporations may impose a privilege tax of up to 4% on each $100 of gross premiums, less return premiums, on fire and marine policies on property in the municipality issued during the previous year; actual amount based on size of municipality.

9 There is no credit for the cost of reinsurance in a company not authorized in Alabama. The tax on other than fire and marine insurers varies by size of city or town. The tax is due Mar. 1. 25-5- 316 Workers Compensation Administration Trust Fund The State has established a trust fund for administrative exp enses. Insurers shall be assessed $250, plus a proportional amount based on total compensation and medical payments made, to provide a total assessment of $5,000,000 per year. Insurers and self-insured plans must file a report by Mar. 1 showing claims for prior year.

10 27-42-8; Property and Casualty Guaranty Association The property and casualty guaranty association may assess an amount up to 1% of net direct premiums for the year preceding the insolvency on the kinds of insurance in the account with the deficiency. Effective May 19, 2008, an assessment of up to 2% of net direct premiums for the year preceding the insolvency for the workers compensation account only. 27-44-9 Life and Health Guaranty Association The life and health guaranty association may assess an amount up to 1% of net direct premiums on the kinds of insurance in the account with the deficiency plus no more than $300 per year as a non-pro rata assessment for administrative expenses.