Captive insurance companies must pay annual premium taxes to the commissioner, with separate rules for direct premiums and assumed reinsurance premium, and with minimum and maximum aggregate tax limits.
§550.23. Taxes on premiums and assessments A. Each captive insurance company shall pay to the commissioner on or before March first of each year a tax at the rate of fifteen-hundredths of one percent on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending the prior December thirty-first, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. B. Each captive insurance company shall pay to the commissioner on or before March first of each year a tax at the rate of two hundred fourteen-thousandths of one percent on the first twenty million dollars of assumed reinsurance premium, one hundred forty-three-thousandths of one percent on the next twenty million dollars, forty-eight-thousandths of one percent on the next twenty million dollars, and twenty-four-thousandths of one percent on each dollar thereafter. However, no reinsurance tax applies to premiums for risks or portions of risks that are subject to taxation on a direct basis pursuant to Subsection A of this Section. No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if such transaction is part of a plan to discontinue the operations of such other insurer, and if the intent of the parties to such transaction is to renew or maintain such business with the captive insurance company. No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of a captive insurance company's parent or affiliates if the intent of such exchange is to renew or maintain such business with the captive insurance company. C. The annual minimum aggregate tax to be paid by a captive insurance company calculated pursuant to Subsections A and B of this Section is seven thousand five hundred dollars. The annual maximum aggregate tax to be paid by a captive insurance company calculated pursuant to Subsections A and B of this Section is two hundred thousand dollars. D. The reduction of tax in accordance with R.S. 22:832 does not apply to captive insurance companies. E. A captive insurance company failing to make returns as required by this Section or failing to pay within the time required for all taxes assessed pursuant to this Section shall be subject to the provisions of R.S. 22:846. F. Subject to the provisions of Subsection C of this Section, two or more captive insurance companies under common ownership and control shall be taxed as though they are a single captive insurance company. G. The tax provided for in this Section constitutes all taxes collectible under the laws of this state from any captive insurance company, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by the state or any parish, city, or municipality within this state, except meals and rooms taxes, sales and use taxes, and ad valorem taxes on real and personal property used in the production of income. H. The premium tax revenues collected pursuant to this Section shall be transferred annually to the department for the regulation of captive insurance companies pursuant to this Subpart. I. The tax provided for in this Section shall be calculated on an annual basis, notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multi-year basis. In the case of multi-year policies or contracts, the premium shall be prorated for purposes of determining the tax pursuant to this Section. J. As used in this Section, the following terms have the following meanings: (1) "Common ownership and control" means ownership and control of two or more captive insurance companies by the same person or group of persons. (2) "Ownership and control" means the following: (a) In the case of a stock corporation, the direct or indirect ownership of eighty percent or more of the outstanding voting stock of the corporation. (b) In the case of a mutual or nonprofit corporation, the direct or indirect ownership of eighty percent or more of the surplus and the voting power of such corporation. (c) In the case of a limited liability company, the direct or indirect ownership of eighty percent or more of the membership interests in the limited liability company. Acts 2008, No. 403, §1, eff. Jan. 1, 2009; Redesignated by Acts 2009, No. 503, §3; Acts 2025, No. 313, §2.