806 KAR 2:095. Accounting and reporting requirements for collecting local government premium tax.
RELATES TO: KRS 91A.080, 304.4-010
STATUTORY AUTHORITY: KRS Chapter 13A, 91A.080, 304.2-110
NECESSITY, FUNCTION, AND CONFORMITY: KRS 304.2-110 provides that the Executive Director of Insurance may make reasonable rules and administrative regulations necessary for and as an aid to the effectuation of any provision of the Kentucky Insurance Code. KRS 91A.080 authorizes the Executive Director of Insurance to adopt administrative regulations for the collection and reporting of local government premium taxes. This administrative regulation provides for the accounting and reporting procedures to be used by every insurance company or its agent, to which this administrative regulation applies, for the collection and reporting of the fees or taxes and the collection fee herein provided by ordinance of a city, county, or urban county government for engaging in the business of insurance therein.
Section 1. Definitions. (1) "Executive Director" means the Commissioner of the Kentucky Office of Insurance.
(2) "Local government premium taxes" means taxes levied pursuant to KRS 91A.080.
(3) "Premiums actually collected within a calendar quarter" means premiums which have been received at an insurer's home, administrative, or regional offices within a calendar quarter. Agency contracts which allow agents a period of time in which to forward premium payments to insurers shall not allow an unreasonably long period of time. An agency contract which allows an agent more than ninety (90) days to forward premium payments to an insurer is presumed to allow an unreasonably long period of time. This presumption may be rebutted by appropriate evidence.
Section 2. Quarterly Payment and Reporting of Local Government Premium Taxes. Each insurer with local government premium tax liability shall make payment of its tax liability based on premiums actually collected within a calendar quarter. Payment shall be made within thirty (30) days of the end of each calendar quarter. Insurers shall make their returns on forms prescribed by the executive director (or forms substantially similar to those prescribed by the executive director) or on forms prescribed by cities, counties, or urban-county governments. Copies of these forms shall not be filed with the executive director unless the executive director directs that returns be filed with the executive director.
Section 3. Annual Reports. (1) Insurers shall furnish each city, county, and urban-county government to which local government premium taxes have been paid during the preceding calendar year a report on the local government premium taxes paid during the preceding calendar year. A copy of this report shall be filed with the executive director accompanied by a fee of five (5) dollars per insurer.
(2) The reports required by this section shall be filed with cities, counties, and urban-county governments and with the executive director by March 31st of each year following the calendar year to which the reports apply.
(3) The reports required by this section shall be on a form prescribed by the executive director (or on a form substantially similar to that prescribed by the executive director).
(4) The form prescribed by the executive director shall contain the following information:
(a) An itemization of all premiums collected for which a local government premium tax is payable together with the amount of such tax collected and paid to each city, county, or urban-county government for the following kinds of insurance:
1. Casualty;
2. Fire and allied perils;
3. Health;
4. Inland marine;
5. Life;
6. Motor vehicle; and
7. Such other kinds of insurance as the executive director may designate.
(b) Such other information as the executive director may designate.
Section 4. Each insurer shall maintain records adequate to support the reports required by this administrative regulation. This section applies to insurance agents and surplus lines brokers to the extent they are responsible for collecting and paying local government premium taxes imposed pursuant to KRS 91A.080.
Section 5. Each insurer must file the reports required by this administrative regulation. Data filed on a group basis is unacceptable. (5 Ky.R. 96; eff. 9-6-78; Am. 9 Ky.R. 383; eff. 10-6-82; 11 Ky.R. 649; 981; eff. 12-11-84; 20 Ky.R. 1697; eff. 2-10-94; TAm eff. 8-9-2007.)