The bill amends Kansas insurance taxation laws, specifically K.S.A. 40-112 and K.S.A. 40-252, with the goal of reducing premium tax rates for insurance companies. It introduces a new framework for the insurance department service regulation fund, which will no longer receive a portion of the premium tax remittance; instead, all fees collected by the commissioner of insurance will be directed to the state treasurer for this fund. The bill sets the tax rate for insurance companies at 2% for the tax year 2025 and 1.98% for 2026 and beyond, while removing previous provisions regarding a 1% tax rate for 1997. It also clarifies the conditions under which insurers can claim credits for taxes paid in other states and ensures that total assessments for affiliated insurers do not exceed a specified percentage increase from the previous fiscal year’s budget.

Additionally, the bill addresses the taxation of life insurers and other insurance entities, particularly concerning funds related to annuity contracts. It specifies that funds received for annuity contracts will not be considered taxable premiums for tax years starting on or after January 1, 1997. The bill allows companies to deduct premiums returned due to cancellations and establishes annual fees and tax rates for various insurance types. It mandates a 2% tax on premiums for companies organized under other states for tax year 2025, maintaining a 1.98% rate for subsequent years. The bill will take effect on January 1, 2026, following its publication in the statute book.

Statutes affected:
As introduced: 40-112, 40-252, 40-4301