Prepaid Pennsylvania Premium Taxes; Notice No. 1996-05 [26 Pa.B. 2136] On April 18, 1996, the Insurance Commissioner (Commissioner) issued an Order permitting certain Pennsylvania domestic insurers to report prepaid Pennsylvania premium taxes (PPPT) as an admitted asset on their financial statements filed with the Insurance Department (Department).
Statutory Authority
Section 320(a)(2) of The Insurance Company Law of 1921 (40 P. S. § 443(a)(2)) provides that ''[u]nless otherwise provided by law, regulation, or order of the Insurance Commissioner, each insurance company, association and exchange shall adhere to the annual or quarterly statement instructions and accounting practices and procedures manuals prescribed by the National Association of Insurance Commissioners . . .'' These guidelines specify that prepaid taxes be treated as non-admitted assets. However, this same quoted language grants the Commissioner express authority to issue an order permitting deviations from these guidelines.
Basis and Effect of the Order
Section 320 applies to domestic stock and mutual insurance companies, associations, and exchanges writing property and casualty or life and health insurance in Pennsylvania. Thus, the Commissioner's Order does not affect foreign insurers doing business in Pennsylvania.
To be considered an admitted asset, the PPPT must have been paid in advance. Therefore, effective April 18, 1996, Pennsylvania domestic insurers may report PPPT as an admitted asset on financial statements filed with the Department.
The Order remains in effect unless and until modified or revoked by the Commissioner.
Questions
If there are any questions relating to this notice, please contact Kaushik K. Patel at 1345 Strawberry Square, Harrisburg, PA 17120, or (717) 787-5890.
LINDA S. KAISER,
Insurance Commissioner[Pa.B. Doc. No. 96-742. Filed for public inspection May 3, 1996, 9:00 a.m.]
