Taxation

  1. Law
  2. Georgia Code
  3. Insurance
  4. Captive Insurance Companies
  5. General Provisions
  6. Taxation

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In lieu of any other taxes imposed by this title, all captive insurance companies licensed under this chapter shall pay the following taxes:

  1. A tax at the rate of 0.4 percent on the first $20 million and 0.3 percent on each dollar thereafter on its direct premiums collected, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which must include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. However, risk retention group captive insurance companies shall only be subject to such taxes on direct premiums collected for coverages within the State of Georgia;
  2. A tax at the rate of 0.225 percent on the first $20 million of assumed reinsurance premium, and 0.150 percent on the next $20 million and 0.050 percent on the next $20 million, and 0.025 percent of 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 this title. 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, provided that the Commissioner verifies that 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;
  3. If the aggregate taxes to be paid by a captive insurance company calculated under paragraphs (1) and (2) of this Code section amount to more than $100,000.00 in any year, the captive insurance company shall pay a maximum tax of $100,000.00 for that year;
  4. Two or more captive insurance companies under common ownership and control, other than sponsored captive insurance companies, shall be taxed as though they were a single captive insurance company. For the purposes of this Code section, the term "common ownership and control" shall mean the direct or indirect ownership, control or hold with power to vote more than 50 percent of the outstanding voting securities or membership interests of two or more such captive insurance companies;
  5. The tax provided for in paragraphs (1) and (2) of this Code section shall be calculated on an annual basis, notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax due; and
    1. For purposes of this Code section, a protected cell, as defined in Article 2 of this chapter, shall be included in the definition of a "captive insurance company."
    2. The common ownership and control aggregation rules set forth in paragraph (4) of this Code section shall apply to each individual protected cell with respect to the participant or participants of such individual protected cell.
    3. Notwithstanding any other provision of this Code section, a sponsored captive insurance company shall be responsible for collecting and remitting taxes due from its protected cells.

(Code 1981, §33-41-22, enacted by Ga. L. 1988, p. 966, § 2; Ga. L. 2015, p. 377, § 1-6/HB 552; Ga. L. 2016, p. 825, § 1/SB 347; Ga. L. 2017, p. 682, § 8/SB 173; Ga. L. 2019, p. 533, § 2-10/HB 99.)

The 2019 amendment, effective July 1, 2019, substituted the present provisions of paragraph (4) for the former provisions, which read: "Two or more captive insurance companies under common ownership and control shall be taxed as though they were a single captive insurance company; and"; substituted "; and" for the period at the end of paragraph (5); and added paragraph (6).


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