CHAPTER 113: INSURANCE COMPANIES

Section

   113.01   Definitions

   113.02   License fee or tax

   113.03   Exceptions

   113.04   Fee or tax imposed when

   113.05   Annual written breakdown required

§ 113.01 DEFINITIONS.

   For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.

   INSURANCE COMPANY. Any company authorized to transact insurance business in the state in accordance with KRS Ch. 304. INSURANCE COMPANY shall also include a surplus lines broker licensed in accordance with KRS Ch. 304, Subtitle 10.

   LOCAL GOVERNMENT. A city, county, charter county, consolidated local government, urban- county government or unified local government that, by this chapter, imposes a license fee or tax upon insurance premium receipts.

(Ord. 2016-02, passed 2-16-2016)

§ 113.02 LICENSE FEE OR TAX.

   (A)   There is hereby imposed on each insurance company a license fee or tax for the privilege of engaging in the business of insurance within the city.

   (B)   The license fee or tax imposed upon an insurance company with respect to life insurance policies shall be 10% and based upon the first year’s premiums only. The license fee or tax shall be applied to the amount of the premiums actually collected within each calendar quarter upon the lives of persons residing within the city.

   (C)   Except as provided in § 113.03 of this chapter, the license fee or tax imposed upon each insurance company with respect to any insurance policy which is not a life insurance policy shall be 10% of the premiums actually collected within each calendar quarter by reason of the issuance of such policies on risks located within the city. The license fee or tax shall apply only to those classes of business which such insurance company is authorized to transact, less all premiums returned to policyholders.

(Ord. 2016-02, passed 2-16-2016)

§ 113.03 EXCEPTIONS.

   No license fee or tax imposed upon premium receipts shall apply to the following:

   (A)   Policies of group health insurance provided for state employees under KRS 18A.225;

   (B)   Policies of group health insurance provided for city employees;

   (C)   Health insurance policies issued to individuals, including policies issued through Kentucky Access;

   (D)   Worker’s compensation insurance;

   (E)   Annuities;

   (F)   Federal flood insurance;

   (G)   Municipal bonds, leases or other debt instruments issued by or on behalf of the city unless the bonds, leases or other debt instruments are issued for profit or on behalf of for-profit or private organizations;

   (H)   Policies or high deductible health plans as defined in 26 U.S.C. § 223(c)(2), commonly referred to as Health Savings Accounts;

   (I)   Policies of insurance, insured or reinsured by the Federal Crop Insurance Corporation, 7 C.F.R. § 400.352(b)(2);

   (J)   Policies insuring or naming the state or one of its agencies or political subdivisions as an insured and surety bonds where the state or one of its agencies or political subdivisions is the obligee. For the purposes of the city premium tax payments, school districts are considered agencies of the state and policies insuring school districts and bonds with school districts as the obligee are exempt from local, government premium taxes;

   (K)   Policies issued to public service companies which pay ad valorem taxes;

   (L)   Entities issued a certificate of authority to do business in Kentucky only as a health maintenance organization pursuant to KRS 304.38-060;

   (M)   Entities issued a certificate of authority to do business in Kentucky as a captive insurer pursuant to KRS 304.49-010; or

   (N)   Domestic life insurance companies electing to be taxed under the provisions of KRS 136.320.

(Ord. 2016-02, passed 2-16-2016)