Delaware Code Title 18 Sec. 6914 – Tax on premiums collected
(a) Each captive insurance company, other than a sponsored captive insurance company (including a sponsored captive insurance company that is also a special purpose financial captive insurance company), and each protected cell of a sponsored captive insurance company shall pay to the Commissioner no later than April 15 of each year a tax at the rate of 2/10 of 1% on each dollar of direct premiums collected or contracted for, during the year ending December 31 next preceding, on policies or contracts of insurance written by the captive insurance company, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums with respect to such preceding year only, which amounts shall include only dividends or distributions of unabsorbed premiums or premium deposits returned or credited to policyholders, up to a maximum tax for such year of $200,000; provided however, that no tax shall be due or payable as to consideration received for annuity contracts.
Terms Used In Delaware Code Title 18 Sec. 6914
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Captive insurance company: means any pure captive insurance company, association captive insurance company, agency captive insurance company, sponsored captive insurance company, industrial insured captive insurance company, special purpose captive insurance company, special purpose financial captive insurance company, series captive insurance company, or risk retention group, whether domestic, foreign or alien, or branch captive insurance company, licensed under the provisions of this chapter. See Delaware Code Title 18 Sec. 6902
- Commissioner: means the Insurance Commissioner of this State. See Delaware Code Title 18 Sec. 6902
- Contract: A legal written agreement that becomes binding when signed.
- Insurance: has the meaning given such term in § 102 of this title. See Delaware Code Title 18 Sec. 6902
- Insurer: has the meaning given such term in § 102 of this title. See Delaware Code Title 18 Sec. 6902
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Person: means a natural person, partnership (whether general or limited), trust, estate, association, corporation, limited liability company, statutory trust, business trust, custodian, nominee or any other individual or entity in its own or any representative capacity, in each case whether domestic, foreign, or alien. See Delaware Code Title 18 Sec. 6902
- Personal property: All property that is not real property.
- Protected cell: has the meaning given such term in § 6932(3) of this title. See Delaware Code Title 18 Sec. 6902
- Series: means a series established under § 17-218(b), § 18-215(b), or § 18-218 of Title 6, § 3804(a) of Title 12, or corresponding law of another state. See Delaware Code Title 18 Sec. 6902
- Series captive insurance company: means a series which has received a certificate of authority pursuant to this chapter. See Delaware Code Title 18 Sec. 6902
- Special purpose captive insurance company: means any person that is licensed under this chapter and designated as a special purpose captive insurance company by the Commissioner. See Delaware Code Title 18 Sec. 6902
- Sponsored captive insurance company: has the meaning given such term in § 6932(5) of this title. See Delaware Code Title 18 Sec. 6902
- State: means the State of Delaware, and "state" means any other state, district, commonwealth or possession of the United States of America. See Delaware Code Title 18 Sec. 6902
- Year: means a calendar year, and is equivalent to the words "year of our Lord. See Delaware Code Title 1 Sec. 302
(b) Each captive insurance company, other than a sponsored captive insurance company (including a sponsored captive insurance company that is also a special purpose financial captive insurance company), and each protected cell of a sponsored captive insurance company shall pay to the Commissioner no later than April 15 of each year a tax at the rate of 1/10 of 1% on each dollar of assumed reinsurance premiums collected or contracted for, during the year ending December 31 next preceding, on policies or contracts of insurance written by the captive insurance company, up to a maximum tax for such year of $110,000; provided, however, that no such tax applies to premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection (a) of this section, and no such 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.
(c) (1) Except for a series captive insurance company, the annual minimum aggregate tax to be paid by a captive insurance company or a protected cell of a sponsored captive insurance company under subsections (a) and (b) of this section shall be $5,000 and the annual maximum aggregate tax to be paid by a captive insurance company or a protected cell of a sponsored captive insurance company under subsections (a) and (b) of this section shall be $200,000, provided, that the tax to be paid by a captive insurance company under subsections (a) and (b) of this section and this subsection is subject to subsections (d), (e) and (f) of this section. Each series captive insurance company shall pay an annual minimum aggregate tax of $3,500. The aggregation of the tax paid by more than 1 series captive insurance company formed within a limited liability company or statutory trust established under § 17-218(b), § 18-215(b) of Title 6, § 3804(a) of Title 12, or corresponding law of another state shall not be restricted by the annual maximum premium tax limitations under subsections (a) and (b) of this section.
(2) Any series captive insurance company that assumes reinsurance premiums from a captive insurance company or protected cell subject to taxation under subsection (a) or (b) of this section may elect to assume the liability for the payment of the tax otherwise payable by such ceding captive insurance company or protected cell on such premium pursuant to subsection (a) or (b) of this section at the rate otherwise applicable to such premium if it had remained in such captive insurance company or protected cell, and such ceding captive insurance company or protected cell shall have no liability under subsections (a) or (b) of this section to the extent of such assumption. Nothing in this paragraph (c)(2) shall affect the application of the minimum tax imposed on the ceding captive insurance company or the series captive insurance company assuming such reinsurance premium and tax liability pursuant to paragraph (c)(1) of this section.
(3) A special purpose captive insurance company formed as a limited liability company or statutory trust established under § 17-218(b), § 18-215(b) of Title 6, § 3804(a) of Title 12, or corresponding law of another state that has established 1 or more series licensed as captive insurance companies shall not be subject to the tax imposed under subsection (a) or (b) of this section only if, during the entire calendar year for which the tax shall be imposed, the special purpose captive insurance company:
a. Did not contract for nor collect any direct premium;
b. Did not contract for nor assume any reinsurance premium; and
c. Was not obligated as an insurance company of any type under any contract of insurance or reinsurance.
(d) The tax provided for in this section shall constitute 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 on or collected from any captive insurance company by this State or any county, city or municipality within this State, except ad valorem taxes on real and personal property used in the production of income.
(e) The tax provided for in this section shall be calculated on an annual basis, notwithstanding that policies or contracts of insurance or contracts of reinsurance are issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax under this section.
(f) A captive insurance company that has 25 or more separate qualified individuals throughout a given tax year and that otherwise would be liable under this section for tax for such year in an amount exceeding $50,000 shall pay to the Commissioner under this section a tax for such year in the amount of $50,000. For purposes of this subsection, “qualified individual” means a natural person employed in this State on a regular basis of 35 or more hours per week either by such captive insurance company, or by a wholly-owned subsidiary of such captive insurance company that provides captive insurance company management, operating, investment or related services exclusively to such captive insurance company. For purposes of this subsection only, if at least 1 of 2 or more captive insurance companies under common ownership and control has 25 qualified individuals, then all captive insurance companies under common ownership and control shall be taxed as though they were a single captive insurance company. For purposes of this subsection only, “common ownership and control” means the direct or indirect ownership of 80% or more of the outstanding voting securities or other voting interests of 2 or more captive insurance companies by the same person or persons.
64 Del. Laws, c. 454, § ?1; 67 Del. Laws, c. 155, § ?1; 75 Del. Laws, c. 150, § ?1; 76 Del. Laws, c. 161, § ?9; 80 Del. Laws, c. 46, § ?11[1]; 81 Del. Laws, c. 147, § 1; 82 Del. Laws, c. 56, § 1;