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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022 )
HOUSE BILL 3427 By: Kerbs
AS INTRODUCED
An Act relating to insurance premium tax ; amending 36
O.S. 2021, Section 624, which relates to payment of
fees and taxes; exempting member ship fees from tax;
and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 624, is
amended to read as follows:
Section 624. A. Every insurance company, copartnership,
insurance association, interinsurance exchange, person, insurer,
nonprofit hospital se rvice and medical indemnity corporation, or
health maintenance organization doing business in this state in the
execution or exchange of contrac ts of insurance, indemnity or health
maintenance services, or as an insurance company of any nature or
character whatsoever, hereinafter referred to in this article as an
insurance company or company, shall annually, on or before the first
day of March, report under oath of the president or secretary or
other chief officer of such company to the Insurance Commission er
the total amount of direct written premiums, membership,
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application, policy and/or registration fees charged during the
preceding calendar y ear, or since the last return of such direct
written premiums, membership, application, policy and/or
registration fees was made by such company, from insurance of every
kind upon persons or on the lives of persons resident in this state,
or upon real and personal property located within this state, and/or
upon any other risks insured within this state , provided, that with
respect to the tax payable annually, considerations received for
annuity contracts and payments received by a health maintenance
organization from the Secretary of Health and Human Services
pursuant to a contract issued under the provisions of 42 U.S.C.,
Section 1395mm(g) shall no longer be deemed to be premiums for
insurance and shall no longer be subject to the tax imposed by this
section. Every such company shall, at the same time, pay to the
Insurance Commissioner:
1. An annual license fee as prescribed by Section 321 of this
title; and
2. An annual tax on all of the direct written premiums after
all returned premiums are deducted, a nd on all membership,
application, policy and/or registration fees, installment and/or
finance fees or charges collected thereby, for the privileges of
having written, continued and/or serviced insurance on lives,
property and/or other risks in this state and of having made and
serviced investments therein during the then expiring license year
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except premiums or fe es paid by any county, city, town or school
district funds or by their duly constituted authorities performing a
public service organized pursuan t to Sections 1001 through 1008 of
Title 74 of the Oklahoma Statutes, or Sections 176 through 180.4 of
Title 60 of the Oklahoma Statutes. Provided, no deduction shall be
made from premiums for dividends paid to policyholders. Except as
set forth in this paragraph, the rate of taxation for all entities
subject to the tax shall be two and twenty -five one-hundredths
percent (2.25%). If any insurance company or other entity liable
for the taxes levied pursuant to the provisions of this section
fails to remit such taxes in a timely manner, it shall remain liable
therefor together with interest thereon at an annual rat e equal to
the average United States Treasury Bill rate of the preceding
calendar year as certified by the State Treasurer on the first
regular business day in January of each year, plus four percentage
points.
a. The rate of taxation for all life insuranc e policies
insuring the life of an employee or director for the
benefit of the employer or a trust sponsored by the
employer, which is purchased by the employer or trust
sponsored by the employer for the benefit of its
employees, shall be computed for each policy at the
rate of:
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(1) two and twenty-five one-hundredths percent
(2.25%) of policy year premium up to One Hundred
Thousand Dollars ($100,00 0.00), and
(2) one-tenth of one percent (1/10 of 1%) of policy
year premium exceeding One Hundred Thousand
Dollars ($100,000.00).
b. Premiums on which taxes are paid under division (2) of
subparagraph a of this paragraph are not subject to
Section 628 of this title. The Commissioner shall
promulgate rules regarding the sale of life insurance
policies subject to di vision (2) of subparagraph a of
this paragraph.
B. For all insurance companies or other entities taxed pursuant
to this section, the annual lice nse fee and tax and all required
membership, application, policy, registration, and agent appointment
fees shall be in lieu of all other state taxes or fees, except those
taxes and fees provided for in the Insurance Code, and the taxes and
fees of any subdivision or municipality of the state, except ad
valorem taxes and the tax required to be paid pursuant to Secti on
50001 of Title 68 of the Oklahoma Statutes. Provided, such license
fee, tax and membership, application, policy, registration, and
appointment fees shall be in lieu of any and all ad valorem taxes
levied on intangible personal property. Any company, e xcept health
maintenance organizations, failing to make such returns and payments
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promptly and correctly shall forfeit and pay to the Insurance
Commissioner, in addition to the amount of the taxes and fees and
interest, the sum of Five Hundred Dollars ($50 0.00) or an amount
equal to one percent (1%) of the unpaid amount, whichever is
greater; and the company so failing or neglecting for sixty (60)
days shall thereafter be debarred from transacting any business of
insurance in this state until the taxes, fee s and penalties are
fully paid, and the Insurance Commissioner shall revoke the license
or certificate of authority granted to the agent or agent s of that
company to transact business in this state. Provided, that when any
such insurance company, copartne rship, insurance association,
interinsurance exchange, person, insurer, or nonprofit hospital
service and indemnity corporation, applies for the first time for a
license to do business in Oklahoma, it shall, at the time of making
such application, pay a li cense fee as prescribed by Section 1425
1435.23 of this title, and, on or before the first day of March,
following, pay the premium tax, membership, application, policy,
registration, and agent appointment fees, as hereinbefore provided.
Such license fee, tax and membership, application, policy,
registration, and appointment fees shall be in lieu of all other
state taxes or fees, except those taxe s and fees provided for in the
Insurance Code, and the taxes and fees of any subdivision or
municipality of the state, except ad valorem taxes and the tax
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required to be paid pursuant to Section 50001 of Title 68 of the
Oklahoma Statutes.
C. Any health maintenance organization failing to file premium
tax returns and payments promptly and correctly shall forfeit an d
pay to the Insurance Commissioner, in addition to the amount of the
taxes, the sum of Five Hundred Dollars ($500.00) or an amount equal
to one percent (1%) of the unpaid amount, whichever is greater. Any
health maintenance organization failing or neglec ting to pay the tax
and penalty shall be debarred from operating in this state and the
Insurance Commissioner shall revoke the license of the hea lth
maintenance organization, until such taxes and penalties are fully
paid.
SECTION 2. This act shall become effective November 1, 2022.
58-2-8658 AQH 11/29/21