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To amend sections 3901.17 and 3905.36 of the Revised | 1 |
Code to decrease from 5% to 1.4% the foreign | 2 |
insurers tax rate. | 3 |
Section 1. That sections 3901.17 and 3905.36 of the Revised | 4 |
Code be amended to read as follows: | 5 |
Sec. 3901.17. (A) As used in this section: | 6 |
(1) "Captive insurer" has the meaning defined in section | 7 |
3905.36 of the Revised Code. | 8 |
(2) "Insurer" includes, but is not limited to, any person | 9 |
that is an affiliate of or affiliated with the insurer, as defined | 10 |
in division (A) of section 3901.32 of the Revised Code, and any | 11 |
person that is a subsidiary of the insurer as defined in division | 12 |
(F) of section 3901.32 of the Revised Code. | 13 |
(3) "Laws of this state relating to insurance" has the | 14 |
meaning defined in division (A)(1) of section 3901.04 of the | 15 |
Revised Code. | 16 |
(4) "Person" has the meaning defined in division (A) of | 17 |
section 3901.19 of the Revised Code. | 18 |
(B) Any of the following acts in this state, effected by mail | 19 |
or otherwise, by any foreign or alien insurer not authorized to | 20 |
transact business within this state, any nonresident person acting | 21 |
on behalf of an insurer, or any nonresident insurance agent | 22 |
subjects the insurer, person, or agent to the exercise of personal | 23 |
jurisdiction over the insurer, person, or agent to the extent | 24 |
permitted by the constitutions of this state and of the United | 25 |
States: | 26 |
(1) Issuing or delivering contracts of insurance to residents | 27 |
of this state or to corporations authorized to do business | 28 |
therein; | 29 |
(2) Making or proposing to make any insurance contracts; | 30 |
(3) Soliciting, taking, or receiving any application for | 31 |
insurance; | 32 |
(4) Receiving or collecting any premium, commission, | 33 |
membership fee, assessment, dues, or other consideration for any | 34 |
insurance contract or any part thereof; | 35 |
(5) Disseminating information as to coverage or rates, | 36 |
forwarding applications, inspecting risks, fixing rates, | 37 |
investigating or adjusting claims or losses, or transacting any | 38 |
matters subsequent to effecting a contract of insurance and | 39 |
arising out of it; | 40 |
(6) Doing any kind of business recognized as constituting the | 41 |
doing of an insurance business under Title XXXIX of the Revised | 42 |
Code or subject to regulation by the superintendent of insurance | 43 |
under the laws of this state relating to insurance. | 44 |
Any such act shall be considered to be the doing of an | 45 |
insurance business in this state by such insurer, person, or agent | 46 |
and shall be its agreement that service of any lawful subpoena, | 47 |
notice, order, or process is of the same legal force and validity | 48 |
as personal service of the subpoena, notice, order, or process in | 49 |
this state upon the insurer, person, or agent. | 50 |
(C) Service of process in judicial proceedings shall be as | 51 |
provided by the Rules of Civil Procedure. Service in or out of | 52 |
this state of notice, orders, or subpoenas in administrative | 53 |
proceedings before the superintendent shall be as provided in | 54 |
section 3901.04 of the Revised Code. | 55 |
(D) Service of any notice, order, subpoena, or process in any | 56 |
such action, suit, or proceeding shall, in addition to the manner | 57 |
provided in division (C) of this section, be valid if served upon | 58 |
any person within this state who, in this state on behalf of such | 59 |
insurer, person, or agent is or has been: | 60 |
(1) Soliciting, procuring, effecting, or negotiating for | 61 |
insurance; | 62 |
(2) Making, issuing, or delivering any contract of insurance; | 63 |
(3) Collecting or receiving any premium, membership fees, | 64 |
assessment, dues, or other consideration for insurance; | 65 |
(4) Disseminating information as to coverage or rates, | 66 |
forwarding applications, inspecting risks, fixing rates, | 67 |
investigating or adjusting claims or losses, or transacting any | 68 |
matters subsequent to effecting a contract of insurance and | 69 |
arising out of it. | 70 |
(E) Nothing in this section shall limit or abridge the right | 71 |
to serve any subpoena, order, process, notice, or demand upon any | 72 |
insurer, person, or agent in any other manner permitted by law. | 73 |
(F) Every person investigating or adjusting any loss or claim | 74 |
under a policy of insurance not excepted under division (I) of | 75 |
this section and issued by any such insurer and covering a subject | 76 |
of insurance that was resident, located, or to be performed in | 77 |
this state at the time of issuance shall immediately report the | 78 |
policy to the superintendent. | 79 |
(G) Each such insurer that does any of the acts set forth in | 80 |
division (B) of this section in this state by mail or otherwise | 81 |
shall be subject to a tax of five per cent on the gross premiums, | 82 |
membership fees, assessments, dues, and other considerations | 83 |
received on all contracts of insurance covering subjects of | 84 |
insurance resident, located, or to be performed within this state. | 85 |
Such insurer shall annually, on or before the first day of July, | 86 |
pay such tax to the treasurer of state, as calculated on a form | 87 |
prescribed by the treasurer of state. If the tax is not paid when | 88 |
due, the tax shall be increased by a penalty of twenty-five per | 89 |
cent. An interest charge computed as set forth in section 5725.221 | 90 |
of the Revised Code shall be made on the entire sum of the tax | 91 |
plus penalty, which interest shall be computed from the date the | 92 |
tax is due until it is paid. The treasurer of state shall | 93 |
determine and report all claims for penalties and interest | 94 |
accruing under this section to the attorney general for | 95 |
collection. | 96 |
For purposes of this division, payment is considered made | 97 |
when it is received by the treasurer of state, irrespective of any | 98 |
United States postal service marking or other stamp or mark | 99 |
indicating the date on which the payment may have been mailed. | 100 |
(H) No contract of insurance effected in this state by mail | 101 |
or otherwise by any such insurer is enforceable by the insurer. | 102 |
(I) This section does not apply to: | 103 |
(1) Insurance obtained pursuant to sections 3905.30 to | 104 |
3905.36 of the Revised Code; | 105 |
(2) The transaction of reinsurance by insurers; | 106 |
(3) Transactions in this state involving a policy solicited, | 107 |
written, and delivered outside this state covering only subjects | 108 |
of insurance not resident, located, or to be performed in this | 109 |
state at the time of issuance, provided such transactions are | 110 |
subsequent to the issuance of the policy; | 111 |
(4) Transactions in this state involving a policy of group | 112 |
life or group accident and sickness insurance solicited, written, | 113 |
and delivered outside this state; | 114 |
(5) Transactions involving contracts of insurance | 115 |
independently procured through negotiations occurring entirely | 116 |
outside this state which are reported to the superintendent and | 117 |
with respect to which the tax provided by section 3905.36 of the | 118 |
Revised Code is paid; | 119 |
(6) An attorney at law acting on behalf of the attorney's | 120 |
clients in the adjustment of claims or losses; | 121 |
(7) | 122 |
Any insurance company underwriter issuing contracts of insurance | 123 |
to employer insureds or contracts of insurance issued to an | 124 |
employer insured. For purposes of this section, an "employer | 125 |
insured" is an insured to whom all of the following apply: | 126 |
(a) The insured procures the insurance of any risk or risks | 127 |
by use of the services of a full-time employee acting as an | 128 |
insurance manager or buyer or the services of a regularly and | 129 |
continuously qualified insurance consultant. As used in division | 130 |
(I)(7)(a) of this section, a "regularly and continuously qualified | 131 |
insurance consultant" does not include any person licensed under | 132 |
Chapter 3905. of the Revised Code. | 133 |
(b) The insured's aggregate annual premiums for insurance on | 134 |
all risks total at least twenty-five thousand dollars; and | 135 |
(c) The insured has at least twenty-five full-time employees. | 136 |
(8) Ocean marine insurance; | 137 |
(9) Transactions involving policies issued by a captive | 138 |
insurer. | 139 |
Sec. 3905.36. (A) Except as provided in divisions (B) and | 140 |
(C) of this section, every insured association, company, | 141 |
corporation, or other person that enters, directly or indirectly, | 142 |
into any agreements with any insurance company, association, | 143 |
individual,
firm, underwriter, or | 144 |
do business in this state, whereby the insured shall procure, | 145 |
continue, or renew contracts of insurance covering subjects of | 146 |
insurance resident, located, or to be performed within this state, | 147 |
with such unauthorized insurance company, association, individual, | 148 |
firm,
underwriter, or | 149 |
a gross premium, membership fee, assessment, dues, or other | 150 |
consideration charged or collected, shall annually, on or before | 151 |
the thirty-first day of January, return to the superintendent of | 152 |
insurance a statement under oath showing the name and address of | 153 |
the insured, name and address of the insurer, subject of the | 154 |
insurance, general description of the coverage, and amount of | 155 |
gross premium, fee, assessment, dues, or other consideration for | 156 |
such insurance for the preceding twelve-month period and shall at | 157 |
the same time pay
to the treasurer of state a tax of | 158 |
four-tenths per cent of such gross premium, fee, assessment, dues, | 159 |
or other consideration, after a deduction for return premium, if | 160 |
any, as calculated on a form prescribed by the treasurer of state. | 161 |
All taxes collected under this section by the treasurer of state | 162 |
shall be paid into the general revenue fund. If the tax is not | 163 |
paid when due, the tax shall be increased by a penalty of | 164 |
twenty-five per cent. An interest charge computed as set forth in | 165 |
section 5725.221 of the Revised Code shall be made on the entire | 166 |
sum of the tax plus penalty, which interest shall be computed from | 167 |
the date the tax is due until it is paid. For purposes of this | 168 |
section, payment is considered made when it is received by the | 169 |
treasurer of state, irrespective of any United States postal | 170 |
service marking or other stamp or mark indicating the date on | 171 |
which the payment may have been mailed. | 172 |
(B) This section does not apply to: | 173 |
(1) Transactions in this state involving a policy solicited, | 174 |
written, and delivered outside this state covering only subjects | 175 |
of insurance not resident, located, or to be performed in this | 176 |
state at the time of issuance, provided such transactions are | 177 |
subsequent to the issuance of the policy; | 178 |
(2) Attorneys-at-law acting on behalf of their clients in the | 179 |
adjustment of claims or losses; | 180 |
(3) Transactions involving policies issued by a captive | 181 |
insurer. For this purpose, a "captive insurer" means any of the | 182 |
following: | 183 |
(a) An insurer owned by one or more individuals or | 184 |
organizations, whose exclusive purpose is to insure risks of one | 185 |
or more of the parent organizations or individual owners and risks | 186 |
of one or more affiliates of the parent organizations or | 187 |
individual owners; | 188 |
(b) In the case of groups and associations, insurers owned by | 189 |
the group or association whose exclusive purpose is to insure | 190 |
risks of members of the group or association and affiliates of the | 191 |
members; | 192 |
(c) Other types of insurers, licensed and operated in | 193 |
accordance with the captive insurance laws of their jurisdictions | 194 |
of domicile and operated in a manner so as to self-insure risks of | 195 |
their owners and insureds. | 196 |
(4) Professional or medical liability insurance procured by a | 197 |
hospital organized under Chapter 3701. of the Revised Code. | 198 |
(C) In transactions that are subject to sections 3905.30 to | 199 |
3905.35 of the Revised Code, each person licensed under section | 200 |
3905.30 of the Revised Code shall pay to the treasurer of state, | 201 |
on or before the
thirty-first day of
January of each year, | 202 |
one and four-tenths per cent of the balance of the gross premiums | 203 |
charged for insurance placed or procured under the license after a | 204 |
deduction for return premiums, as reported on a form prescribed by | 205 |
the treasurer of state. The tax shall be collected from the | 206 |
insured by the surplus line broker who placed or procured the | 207 |
policy of insurance at the time the policy is delivered to the | 208 |
insured. No license issued under section 3905.30 of the Revised | 209 |
Code shall be renewed until payment is made. If the tax is not | 210 |
paid when due, the tax shall be increased by a penalty of | 211 |
twenty-five per cent. An interest charge computed as set forth in | 212 |
section 5725.221 of the Revised Code shall be made on the entire | 213 |
sum of the tax plus penalty, which interest shall be computed from | 214 |
the date the tax is due until it is paid. For purposes of this | 215 |
section, payment is considered made when it is received by the | 216 |
treasurer of state, irrespective of any United States postal | 217 |
service marking or other stamp or mark indicating the date on | 218 |
which the payment may have been mailed. | 219 |
Section 2. That existing sections 3901.17 and 3905.36 of the | 220 |
Revised Code are hereby repealed. | 221 |