ASSEMBLY, No. 790

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblywoman FARRAGHER and Assemblyman PASCRELL

An Act providing for reciprocal nonretaliatory treatment of certain foreign insurance companies and amending P.L.1950, c.231.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Section 1 of P.L.1950, c.231 (C.17:32-15) is amended to read as follows:

    1. When by the laws of any other state or foreign country any premium or income or other taxes, or any fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions are imposed upon New Jersey insurance companies, or reciprocal or interinsurance exchanges, doing business in such other state or foreign country, or upon their agents therein, which are in excess of such taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions imposed upon insurance companies, or reciprocal or interinsurance exchanges of such other state or foreign country doing business in New Jersey, or upon their agents therein, so long as such laws continue in force the same premium or income or other taxes, or fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions and restrictions of whatever kind shall be imposed upon insurance companies, or reciprocal or interinsurance exchanges of such other state or foreign country doing business in New Jersey, or upon their agents therein. Any tax obligation imposed by any city, county, school district or other political subdivision of any other state or foreign country on New Jersey insurance companies, or reciprocal or interinsurance exchanges, shall be deemed to be imposed by such state or foreign country within the meaning of this section, and the Commissioner of Insurance for the purpose of this section may compute the burden of any such tax obligation on an aggregate statewide or foreign countrywide basis as an addition to the rate of tax payable by similar New Jersey companies, or reciprocal or interinsurance exchanges, in such state or foreign country. The addition to the rate of tax payable by similar New Jersey companies, or reciprocal or interinsurance exchanges, shall be calculated by dividing (i) the aggregate of their tax obligations paid to any such city, county, school district or other political subdivision of such state or foreign country by (ii) the aggregate of the taxable premiums under the premium taxing statute of such state or foreign country. The commissioner may issue regulations to carry out the purpose of this act.

    a. The provisions of this section shall not apply to ad valorem taxes on real or personal property or to personal income taxes or to special purpose assessments imposed in connection with particular kinds of insurance.

    b. The provisions of this section shall not apply from January 1, 1991 through December 31, 1997, to insurance companies, or reciprocal or interinsurance exchanges, other than the life and health insurance business of such insurance companies, organized or existing under the laws of another state or foreign country, the laws of which state or foreign country do not impose retaliatory premium or income or other taxes, or fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions or which grant, on a reciprocal basis, exemptions from retaliatory premium or income or other taxes, or fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions to New Jersey insurance companies, or reciprocal or interinsurance exchanges, doing business in such other state or foreign country, or to their agents therein.

(cf: P.L.1985, c.88, s.1)

    2. This act shall take effect immediately and shall be retroactive to January 1, 1991 and apply to premiums written on and after that date.

STATEMENT

    This bill provides that New Jersey will not impose retaliatory tax provisions on property and casualty foreign insurance companies, other than on their life and health insurance business, which are domiciled in states which either (a) do not themselves impose retaliatory taxes, or (b) provide reciprocal nonretaliation for New Jersey property and casualty insurance companies doing business in those states. The provisions of the bill will apply to premiums written by insurers on and after January 1, 1991 and will expire on December 31, 1997.

Provides for reciprocal nonretaliatory treatment of certain foreign insurers under insurance premiums tax and other provisions.