Present law generally requires the charge for valuation of life policies to be allowed as a credit against the premium taxes collected whenever the charges are paid to the commissioner of commerce and insurance.
As often as once in five years, present law requires the commissioner, or the commissioner's designee, to visit each insurance company licensed in this state and examine its affairs, especially as to its financial condition and ability to fulfill its obligations and whether it has complied with the law. Present law also requires the commissioner to make examination of such an insurance company whenever the commissioner deems it prudent to do so, or upon the request of five or more stockholders or persons who are peculiarly interested in the company and have made an affidavit of their belief that the company is in unsound condition. The full cost of the examination must be paid to the department of commerce and insurance for its use and benefit in meeting the expenses and compensation for the persons engaged in examinations.
This bill deletes the provision of law allowing the charge for valuation of life insurance policies to be a credit against the premium taxes collected and provides, instead, that the charges, expenses, and fees paid to the department by insurance companies for examinations described above are allowed as a credit against the premium taxes collected. However, a credit is not allowed for examination charges, expenses, and fees paid prior to January 1, 2023.
For tax years beginning on or after January 1, 2023, this bill provides that charges, expenses, and fees that exceed an insurance company's premium tax liability for the same tax year are not refundable but can be carried forward to a subsequent tax year, not to exceed five years, until the full excess is claimed. In a subsequent carryforward year, the excess carryforward amount is allowed as a credit for that year before the charges, expenses, and fees, if any, that are paid in that year are allowed. However, the bill clarifies that a credit is not allowed for fines and penalties paid for violating the insurance laws of this state.

Statutes affected:
Introduced: 56-4-211