Section 21.33.055. Unauthorized insurance premium tax.

   (a) Except as to premiums on lawfully procured surplus lines insurance exported under AS 21.34 and premiums on independently procured insurance on which a tax has been paid under AS 21.33.061, every nonadmitted insurer shall pay to the director, on or before March 1 following the calendar year in which the insurance was procured, continued, or renewed, a premium-receipts tax of 3.7 percent of gross premiums written for the insurance other than wet marine and transportation insurance and a premium-receipts tax of three-fourths of one percent of gross premiums charged for the wet marine and transportation insurance if the insured's home state is this state. If the insurance covers properties, risks, or exposures located or to be performed both in and out of this state, the tax payable shall be computed based on an amount equal to that portion of the gross premiums allocated under (b) of this section to this state, plus an amount equal to the portion of the premiums allocated under (b) of this section to other properties, risks, or exposures located or to be performed outside of this state. The insurance on subjects resident, located, or to be performed in this state procured through negotiations or an application, in whole or in part occurring or made in or from in or out of this state, or for which premiums in whole or in part are remitted directly or indirectly from in or out of this state, shall be considered to be insurance procured or continued or renewed in this state. The tax paid by the insurer under this section is in lieu of all insurer taxes and fire department dues. In this subsection, "premium" includes all premiums, membership fees, assessments, dues, and any other consideration for insurance.
   (b) In determining the amount of premiums taxable in this state, all premiums written, procured, or received in this state shall be considered written on property or a subject located or resident in this state, except premiums that are properly allocated or apportioned and reported as taxable premiums of another state. In determining the amount of gross premiums taxable in this state covering a subject resident, located, or to be performed both inside and outside the state, the tax due shall be computed on that portion of the policy premium that is attributable to the subject resident, located, or to be performed in this state and that relates to the kind of insurance being placed as determined by reference to an allocation schedule as follows:
        (1) if a policy covers more than one classification,
             (A) for any portion of the coverage identified by a classification on the allocation schedule, the tax shall be computed by using the allocation schedule for the corresponding portion of the premium;
             (B) for any portion of the coverage not identified by a classification on the allocation schedule, the tax shall be computed by using an alternative equitable method of allocation for the property or subject;
             (C) for any portion of the coverage where the premium is indivisible, the tax shall be computed by using the method of allocation that pertains to the classification describing the predominant coverage.
        (2) if the information provided is insufficient to substantiate the method of allocation used or if the director determines that the method is incorrect, the director shall determine the equitable and appropriate amount of tax due to the state as follows:
             (A) by use of the allocation schedule where the subject is appropriately identified in the schedule;
             (B) where the allocation schedule does not identify a classification appropriate to the coverage, the director may give acceptance by significant weight to documented evidence of the underwriting bases and other criteria used by the insurer or may give consideration to other available information to the extent it is sufficient and relevant, including the percentage of the insured's physical assets in this state, the percentage of the insured's sales in this state, the percentage of income or resources derived from this state, and the amount of premium tax paid to another jurisdiction for the policy.
   (c) This section does not apply to insurance of risks of the state or a political subdivision of the state, or to insurance of aircraft primarily engaged in interstate or foreign commerce.
   (d) On default of a nonadmitted insurer in the payment of the tax, the insured shall pay the tax within 30 days after written notice from the director of the default by the nonadmitted insurer. If the tax prescribed by this section is not paid by the nonadmitted insurer within the time stated or by the insured within the time stated after notice of default by the nonadmitted insurer, the tax may be increased by
        (1) a late payment fee of $1,000 or 10 percent of the tax due, whichever is greater;
        (2) interest at the rate of one percent a month or part of a month from the date the payment was originally due to the date paid; and
        (3) a penalty not to exceed $100 a day or 25 percent of the tax due, whichever is greater, from the date the payment was due to the date paid.

Authorities

21.55.430

Notes

References

AS 21.55.430 Alaska comprehensive health insurance fund.

History

(Sec. 1 ch 234 SLA 1968; am Sec. 14 ch 117 SLA 1984; am Sec. 106 - 108 ch 67 SLA 1992; am Sec. 28, 29 ch 38 SLA 2002; am Sec. 46, 47 ch 23 SLA 2011)