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90_HB3229ham001
LRB9011168JSgcam04
1 AMENDMENT TO HOUSE BILL 3229
2 AMENDMENT NO. . Amend House Bill 3229 by replacing
3 the title with the following:
4 "AN ACT to amend the Illinois Insurance Code by amending
5 Section 409."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 5. The Illinois Insurance Code is amended by
9 changing Section 409 as follows:
10 (215 ILCS 5/409) (from Ch. 73, par. 1021)
11 Sec. 409. Annual privilege tax payable by foreign or
12 alien companies.
13 (1) Every foreign or alien company doing an insurance
14 business in this State, except fraternal benefit societies,
15 shall, for the privilege of doing business in this State by
16 renewal of certificate of authority as provided in Section
17 114, pay to the Director for the State treasury a State tax
18 equal to 2% 2 per cent of the net taxable premium income,
19 together with any amounts due under Section 444. Every
20 domestic insurance company, except a fraternal benefit
21 society, which fails to comply with all the requirements of
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1 subsection (4) of this Section must pay to the Director for
2 payment into the State Treasury a State tax equal to 2% 2 per
3 cent of the net taxable premium income and upon the failure
4 of any company to pay any such tax due, the Director may, by
5 order, revoke the company's certificate of authority after
6 giving 20 days written notice to the company. The gross
7 taxable premium income shall be the gross amount of premiums
8 received on direct business during the preceding calendar
9 year on contracts covering risks in this State, except
10 premiums on annuities and except premiums on group insurance
11 contracts awarded after the effective date of this amendatory
12 Act of 1976 under the State Employees Group Insurance Act of
13 1971, and except premiums for deferred compensation plans for
14 employees of the State, units of local government or school
15 districts. The net taxable premium income shall be the gross
16 taxable premium income reduced only by the following:
17 (a) the amount of premiums returned thereon which
18 shall be limited to premiums returned during the
19 preceding calendar year and shall not include the return
20 of cash surrender values or death benefits on life
21 policies;
22 (b) dividends on such direct business that have
23 been paid in cash, applied in reduction of premiums or
24 left to accumulate to the credit of policyholders or
25 annuitants. In the case of life insurance, no deduction
26 shall be made for the payment of deferred dividends paid
27 in cash to policyholders on maturing policies; dividends
28 left to accumulate to the credit of policyholders or
29 annuitants shall be included as gross taxable premium
30 income when such dividend accumulations are applied to
31 purchase paid-up insurance or to shorten the endowment or
32 premium paying period.
33 (2) There shall be deducted from the tax thus computed,
34 but only to the extent thereof, the amount, if any, paid
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1 during the preceding calendar year: (a) for the benefit of
2 organized fire departments, to cities, villages, incorporated
3 towns and fire protection districts of this State as a tax on
4 premiums received by such company in such cities, villages,
5 incorporated towns and fire protection districts, and (b) as
6 a tax to this State or any subdivision thereof on or measured
7 by net income, and (c) as a tax to this State or any
8 subdivision thereof on or measured by the value of the
9 company in excess of the value of its tangible property, and
10 (d) as a fee or charge for the valuation of life insurance
11 policies, and (e) if the company is not an Illinois domestic
12 company, as a financial regulation fee under subsection (7)
13 of Section 408 of this Code for the examination and analysis
14 of financial condition, and the remainder shall be paid by
15 such company as its annual privilege tax, and (f) for fees
16 paid pursuant to Section 408 (1) (jj).
17 (3) If a company survives or was formed by a merger,
18 consolidation, reorganization or reincorporation, the
19 premiums received, and amounts returned or paid, by all
20 foreign or alien companies parties to such merger,
21 consolidation, reorganization or reincorporation, shall, for
22 the purposes of determining the amount of the tax imposed by
23 this Section, be regarded as received, returned or paid by
24 such surviving or new company.
25 (4) A domestic company must pay the State tax in
26 subsection (1) of this Section unless:
27 (a) it maintains its principal place of business in
28 this State; and
29 (b) it maintains in this State officers and
30 personnel knowledgeable of and responsible for the
31 company's operation, books, records, administration, and
32 annual statement; and
33 (c) it conducts in this State substantially all of
34 its underwriting, policy issuing, and serving operations
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1 relating to Illinois policyholders and certificate
2 holders; and
3 (d) it complies with the provisions of Section 133
4 (2) of this Code.
5 Payments shall be due on an estimated basis for all of
6 calendar year 1969 on or before September 1, 1969. Effective
7 January 1, 1970, a company shall make an annual return for
8 the preceding calendar year on or before March 1st setting
9 forth such information on such forms as the Director may
10 reasonably require. Payments of quarterly installments of
11 the taxpayer's total estimated tax for the current calendar
12 year shall be due on or before April 15th, June 15th,
13 September 15th and December 15th, unless for the calendar
14 year 1971, and each calendar year thereafter, insurers
15 transacting insurance in this State whose annual tax for the
16 preceding calendar year was less than $5,000, shall then make
17 only an annual return. Failure of a company to make
18 quarterly payments, if required, of at least one-fourth of
19 either (a) the total tax paid during the previous calendar
20 year or (b) 80% of the actual tax for the current calendar
21 year shall subject it to the penalty provisions set forth in
22 Section 412 of this Act.
23 (Source: P.A. 86-753; 87-108.)".