(a) An in-state insurance company that has an insurance company affiliate may enter into reinsurance agreements with the affiliate, pursuant to which the tax imposed on gross premiums under § 56-4-205 is allocated from the ceding company to the reinsuring company. The reinsurance agreements shall be effective to enable the reinsuring company to use the premium tax liability so allocated as a credit under § 56-4-217; provided, that the ceding company may not use as a credit under § 56-4-217 any tax liability allocated by the ceding company to the reinsuring company. No allocation of premium tax liability as described in this section shall relieve the ceding company from responsibility for payment of the full premium tax on insurance business written in this state and for the filing of sworn returns in accordance with this section. Nothing in this section shall result in a reduction of the premium tax and franchise and excise tax liability of the ceding company from that which would have been imposed in the absence of this section.
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Terms Used In Tennessee Code 56-4-221

  • Affiliate: means any insurance company that controls, is controlled by, or is under common control with the insurer writing the policies. See Tennessee Code 56-4-210
  • Control: means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a company. See Tennessee Code 56-4-210
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • gross premiums: means maximum gross premiums as provided in the policy contracts, new and renewal, including policy or membership fees, whether paid in part or in whole by cash, automatic premium loans, dividends applied in any manner whatsoever, and without deduction or exclusion of dividends in any manner. See Tennessee Code 56-4-204
  • insurance company: means any insurance, fidelity or surety company, including any corporation, company, partnership, association, society, order, fraternal or otherwise, individual or aggregation of individuals engaging in, or proposing or attempting to engage in, any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships and corporations. See Tennessee Code 56-4-201
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) As used in this section:

(1) “In-state insurance company” means an insurance company:

(A) Having its principal place of business in this state; and
(B) That does not transact insurance business in any other state; and
(2) “Insurance company affiliate” means a corporation:

(A) Authorized to conduct insurance business in this state after March 19, 1991;
(B) That does not transact insurance business in any other state; and
(C) Fifty percent (50%) or more of the voting stock of which is directly or indirectly controlled by, or under common control with, an in-state insurance company.
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