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| Public Act 098-1169
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| SB3366 Enrolled | LRB098 19763 RPS 54978 b |
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Insurance Code is amended by |
changing Sections 409 and 444 as follows:
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(215 ILCS 5/409) (from Ch. 73, par. 1021)
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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
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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
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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 |
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Section 444 of this Code, except that the tax to be paid on any
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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
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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
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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
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government, or school districts. The net taxable premium shall |
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be the gross
taxable premium written reduced only by the |
following:
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(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
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including annuities;
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(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
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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.
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(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 |
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(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
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against the company's privilege tax liability for any other |
taxing period or
calendar year.
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(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.
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(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
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payments, if required, of at least 25% of either (i) the total |
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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.
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(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:
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(i) each health maintenance organization shall have no |
estimated tax
installments;
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(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
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December 31, 1998; and
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(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
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premium written during the calendar year 1998.
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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.
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(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 |
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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.
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(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.)
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(215 ILCS 5/444) (from Ch. 73, par. 1056)
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Sec. 444. Retaliation.
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(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
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on foreign or alien companies, or shall require any deposit of |
securities
or other obligations in such state or country, for |
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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
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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
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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,
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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 |
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company of this State in such other state or country.
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(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
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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.
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(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
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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 |
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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
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conducting the business of insurance whether calculated as a |
percentage of
income, gross receipts, premium, or otherwise.
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(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.
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(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.)
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Section 99. Effective date. This Act takes effect upon |
becoming law.
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