Section 21.33.061. Independently procured insurance; premium tax.

   (a) Every insured who procures or causes to be procured or continues or renews insurance with a nonadmitted insurer, or an insured or self-insurer who so procures or continues excess loss, catastrophe or other insurance, upon a subject of insurance resident, located, or to be performed in this state, other than insurance lawfully procured through a surplus lines broker under AS 21.34 shall, within 30 days after the date the insurance was procured, continued, or renewed, file a report with the director in writing and in a form prescribed by the director. The report must show the name and address of the insured, name and address of the insurer, the subject of the insurance, a general description of the coverage, the amount of premium currently charged, and additional pertinent information required by the director.
   (b) Insurance in a nonadmitted insurer of a subject of insurance 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, is considered to be insurance procured or continued or renewed in this state within the intent of (a) of this section.
   (c) If the insured's home state is this state, the insured shall pay to the director, on or before March 1 following the calendar year in which the insurance was procured, continued, or renewed, a tax of 3.7 percent of the gross premiums paid for the insurance other than wet marine and transportation insurance, less any return premiums. For wet marine and transportation insurance, if the insured's home state is this state, the insured shall pay to the director a tax of three-fourths of one percent of the gross premiums paid for the wet marine and transportation insurance. 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 (d) of this section to this state, plus an amount equal to the portion of the premiums allocated under (d) of this section to other properties, risks, or exposures located or to be performed outside of this state. In the event of cancellation and rewriting of the insurance contract, the additional premium for tax purposes is the premium in excess of the unearned premium of the cancelled insurance contract. In this subsection, "premium" includes all premiums, membership fees, assessments, dues, and any other consideration for insurance.
   (d) 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, the tax due shall be computed on that portion of the policy premium that is attributable to a 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 this 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 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 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.
   (e)   [Repealed, Sec. 223 ch 67 SLA 1992]. 
   (f) The attorney general, upon request of the director, shall proceed in the courts of this or another state or in a federal court or agency to recover the tax not paid within the time prescribed in this section.
   (g) This section does not apply to insurance of risks of the state or a political subdivision of the state, to insurance of aircraft primarily engaged in interstate or foreign commerce, to life insurance, to health insurance, or to annuity contracts.
   (h) This section does not abrogate or modify, and may not be construed or considered to abrogate or modify, a provision of AS 21.33.037 or 21.33.042 or another provision of this chapter.
   (i)   [Repealed, Sec. 223 ch 67 SLA 1992]. 
   (j) If the tax payable under (c) of this section is not paid within the time stated, 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 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

21.33.055

Notes

References

AS 21.33.055 Unauthorized insurance premium tax.

History

(Sec. 1 ch 234 SLA 1968; am Sec. 15 - 18 ch 117 SLA 1984; am Sec. 109 - 112, 223 ch 67 SLA 1992; am Sec. 24 ch 56 SLA 1996; am Sec. 30, 31 ch 38 SLA 2002; am Sec. 48, 49 ch 23 SLA 2011)