hb 0678

CHAPTER 277

HB 678-FN – FINAL VERSION

AN ACT relative to the insurance premium tax.

SPONSORS: Rep. Camm, Rock 8; Rep. Hunt, Ches 7; Sen. Roberge, Dist 9; Sen. Flanders, Dist 7

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to the insurance premium tax.

Be it Enacted by the Senate and House of Representatives in General Court convened:

277:1 Purpose and Findings. The general court finds that over the last decade the state has witnessed a significant loss of insurance companies that were domesticated in New Hampshire. The loss of a domestic insurance company to another state takes revenue and jobs from the state and impacts the overall welfare of the general public by the absence of a corporate good citizen no longer available to participate in good works in the communities of New Hampshire. A tool that may be used to retain current domestic insurers and recruit other companies is a reduction in the premium tax rate. A reduction in the premium tax rate will be an effective way to spur economic development and reverse recent losses of domestic insurers. Such a reduction will stimulate growth in financial services and other sectors in New Hampshire. States that have lowered their insurance premium taxes have experienced significant economic gain as many insurers have moved to incorporate in those states. Those states that lowered their insurance premium tax rates have found that investment by insurers in the form of new employment, acquisition of property, and consumption of services have stimulated economic growth. By reducing the insurance premium tax, New Hampshire will give itself a competitive advantage over other eastern states with higher rates. The general court finds that the economic development stimulated by a reduction in the insurance premium tax rate in New Hampshire will be of great benefit to the state.

277:2 Insurance; Premium Tax Decreased. Amend RSA 400-A:32, I to read as follows:

I.(a) Every insurer shall pay to the insurance commissioner a tax [~~of 2 percent~~] upon such net premiums, for lines of business written, as set forth in the report filed pursuant to RSA 400-A:31, I, less estimated payments made in accordance with RSA 400-A:32, II[;], as follows:

(1) Effective July 1, 2007, a tax of 1.75 percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, and RSA 401:1-a, I and II;

(2) Effective January 1, 2009, a tax of 1.50 percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, and RSA 401:1-a, I and II;

(3) Effective January 1, 2010, a tax of 1.25 percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, and RSA 401:1-a, I and II; and

(4) Effective January 1, 2011, a tax of one percent for all lines of business written pursuant to RSA 401:1, I-III and V-VIII, and RSA 401:1-a, I and II.

(5) A tax of 2 percent for all lines of business written pursuant to RSA 401:1, IV, including, but not limited to, insurers licensed pursuant to RSA 420-A, RSA 420-B, and RSA 420-F.

(b) Provided, however, that every authorized insurer shall pay to the insurance commissioner a minimum annual premium tax of no less than $200.

277:3 Insurance Premium Tax; Collection. Amend RSA 400-A:32, II to read as follows:

II.(a) For the calendar year ending December 31, 2006, on or before March 15, June 15, September 15, and December 15 [~~of each year~~], every authorized insurer required to pay a tax in accordance with RSA 400-A:32, I shall pay to the insurance commissioner an amount equal to 1/4 of the previous calendar year's tax paid pursuant to said paragraph; provided, however, any authorized insurer having an estimated liability of $100 or less for each quarter shall make payment in full on March 15. These payments shall be considered as a partial payment of the tax upon the business done in the state during the calendar year in which the payment was received.

(b) For the calendar year ending December 31, 2007, and for every year thereafter, on or before March 15 of each year every authorized insurer required to pay a tax in accordance with RSA 400-A:32, I shall make payment in full to the insurance commissioner of an amount equal to 100 percent of the previous calendar year's taxes paid pursuant to said paragraph. The payments shall be considered as a partial payment of the tax upon the business done in the state during the calendar year in which the payment was received.

I. The insurance commissioner and the commissioner of the department of resources and economic development shall mutually develop and implement a comprehensive plan to retain domestic insurers and recruit foreign insurers to redomesticate in New Hampshire with the goal of retaining and creating jobs and the economic activity associated therewith. The plan shall be jointly filed with the fiscal committee of the general court on or before September 30, 2006.

II. The insurance commissioner and the commissioner of the department of resources and economic development shall jointly file a report detailing the results of the implementation of their filed plan, including information on the number of redomestications and new jobs associated therewith with the fiscal committee of the general court on or before July 1, 2007, and every month thereafter, until such time as the fiscal committee shall certify that there is no longer a need to file such report.