Our Insurance Tax professionals understand the relationship between tax laws and the unique accounting, regulatory, and business environment of the insurance industry.
Ryan’s Insurance Tax practice delivers the most comprehensive, integrated suite of tax services uniquely tailored to meet the challenges facing large and mid-market insurance companies, including surplus lines. Our Insurance Tax services include a single source solution for:
- Insurance placement, tax review, planning, and minimization strategies
- Tax return reviews and refunds
- Tax return preparation and filing
- Audit defense and penalty mitigation
- Petitions for redetermination
Our combination of technical knowledge and industry specialization, backed by more than 45 global tax practice areas, delivers insurers a single-source solution for their business tax issues, which is unmatched in the industry today.
We understand the complex tax environment facing insurance companies. We understand the unique provisions of the tax codes in the jurisdictions where they conduct business. We stay current with the latest rulings and changes in tax law as they apply to the industry. And our efforts translate into significant tax savings, improved profitability, and greater efficiency. Our advisory services help insurance clients implement strategic tax planning and minimization strategies that improve overall performance across the tax value chain.
Captive Insurer Premium Tax
Controversies and Appeals
Direct Procurement Tax
Surplus Lines Tax
Voluntary Disclosure and Registration
Large corporations or other entities may establish captive insurers to write their risks instead of procuring insurance from non-affiliated insurers. Captive insurers are subject to premium taxes in the state in which they are domiciled. These taxes are generally due regardless of the location of the insured risks. State statutes related to domestic captive insurers generally provide for a cap on the total taxes due for a calendar year. States with unauthorized insurance premium tax statutes may also collect a tax from non-licensed captive insurers on the risks properly allocated to those states, regardless of the premium taxes paid to the state of domicile. In order to minimize tax exposures, it is crucial for entities having captive insurers to engage in strategic tax planning.
Ryan’s expertise in all areas of insurance premium taxes provides tremendous value for non-insurance clients needing comprehensive and broad-based tax services.
Ryan is dedicated to resolving tax disputes expeditiously by assisting clients with controversy resolution and legislative services, as well as protecting the rights of taxpayers through honest and fair public policy. We’re aggressive but professional. We understand the importance of constructive relationships with taxing authorities. We also understand that respect is earned. From informal conferences to administrative level appeals, our goal is to resolve tax controversies quickly and professionally. And when disputes can’t be resolved through simple negotiation, we’re prepared to fight for our clients’ interests for as long as it takes.
Direct procurement taxes are also known as “independently procured” or “self-procured.” Similar to the surplus lines tax, this tax is due from the policyholder (the insured) instead of the agent or broker, when insurance is procured directly from non-licensed insurers. In such a situation, an agent would not be involved in the placement of the insurance. On policies covering multistate risks, federal law provides that only the “home state” of the insured may collect a tax on such coverage.
The direct procurement tax impacts the policyholder and not the agent or the insurer. As a result, a broad spectrum of entities, from churches to Fortune 500 companies, is impacted by this tax. Our Insurance Tax professionals have decades of experience in all areas of non-licensed insurance premium taxes. Regardless of where polices are written, the identity of the insured, or where the insured is located, Ryan’s Insurance Tax practice provides a comprehensive, integrated suite of tax services geared to the various premium tax statutes and jurisdictions. This expertise in direct procurement tax is another area of value for non-insurance Ryan clients needing comprehensive and broad-based tax services.
The insurance premium tax is paid by insurance companies to each state where they are licensed. States may have one tax rate that applies to all forms of insurance coverage, or they may have different rates for life, accident and health, property and casualty, and title insurance. Some states also apply a state income tax to each insurer, with the higher of the taxes being due.
In addition to the insurance premium tax, insurers are subject to various regulatory and examination fees, as well as guaranty fund, windstorm, and other special purpose assessments. Premium tax credits may be allowed on certain fees or assessments paid. Insurers operating in states other than their state of domicile are also subject to “equalizer taxes” in those states. These taxes are generally known as retaliatory taxes and are intended to act as an inducement to the states to adopt tax rates that allow insurers domiciled in all states to compete equally in the insurance marketplace.
Our Insurance Tax professionals have decades of experience in all areas of premium taxes, fees, retaliatory taxes, assessments, and credits. Regardless of the size and where the insurer or insurance group is domiciled or headquartered, the Ryan Insurance Tax practice provides a comprehensive, integrated suite of tax services geared to the various premium tax statutes and jurisdictions.
Non-licensed insurers are allowed to operate to place coverage on extreme risks, or where coverage is generally not available in the licensed market. Generally, these insurers are deemed “eligible” or “approved” under the authority of the various state departments of insurance. In most states, there is a transaction tax on the premium for risks associated with each state. With surplus lines, the agent or broker placing the coverage is responsible for collecting the tax due in each state from the policyholder and remitting it on a scheduled basis. On policies covering multistate risks, federal law provides that only the “home state” of the insured (defined as the state where the insured resides or where the home office is located) may collect a tax on such coverage.
Our Insurance Tax professionals have decades of experience in the areas of surplus lines and other non-licensed insurance premium tax filings. Our professionals are constantly monitoring statute and rule amendment changes, and multistate and federal issues that impact surplus lines agents and brokers. Ryan is a member of key insurance associations and participates in regulatory committee functions. Through active participation, Ryan is highly informed on all tax and regulatory matters that impact this very diverse and important part of the insurance industry.
Ryan’s Tax Compliance professionals provide a breadth of expertise in tax administration and process improvement to help clients effectively manage their compliance processes and focus on a broader strategic vision for total tax performance. Functioning as an extension of our client’s tax department, we offer a full suite of compliance and automation solutions that streamline internal tax operations, including managing costs and employee resources, eliminating manual processes, minimizing overpayments and errors on returns, and reducing risk and the likelihood of notices and penalties.
Certain states have an insurance premium tax that is an alternative to taxes due on insurance in the non-licensed market. It generally works in coordination with the surplus lines and direct procurement tax statutes but can be broadly enforced on the agent, the policyholder, or the insurer placing the coverage. Federal law does not impede the enforcement of the unauthorized insurance tax statutes.
Since not all states have this form of tax statute, it is not well understood by the insurance industry or entities procuring insurance from the non-admitted market. Since the tax is similar but different from surplus lines and direct procurement statutes, its impact can be very broad and includes non-insurance entities such as non-profit, religious, and Fortune 500 companies. It can impact licensed and surplus lines insurers when they operate contrary to their insurance authorization. Non-licensed captive insurers can owe this tax in addition to what is paid to their state of domicile. Ryan provides a comprehensive, integrated suite of tax services to mitigate risk and minimize the potential impact of unauthorized insurance taxes.
Ryan’s Voluntary Disclosure and Registration services assist corporations in negotiating voluntary disclosure agreements (VDAs) with the most favorable results possible. We have experts in each tax specialty who have assisted clients with VDAs in many jurisdictions. We assist clients with single or multiple negotiation requirements, involving one or multiple tax issues. Ryan professionals have years of experience and maintain constant contact with the tax jurisdictions to ensure the most up-to-date VDA information is readily available to our clients.
As part of any engagement with a client, we first analyze all of the facts attributed to the business and activities taking place in a respective jurisdiction. We then work with our client to determine potential exposure and possible methods to minimize that exposure. This process might entail determining whether a client’s customers have accrued and remitted tax, the customers’ current audit status, and possible back billing of taxes. We customize each project to maximize client value and simultaneously interact with multiple jurisdictions, so we can efficiently complete the engagement. In all instances, our clients receive a closing agreement or a signed agreement with each tax jurisdiction to clearly define their exposure.
Ryan assists clients in registering and settling past taxes, if applicable, and paying the correct amount required under each jurisdiction’s VDA program. We are often able to negotiate prospective agreements when our client’s fact pattern presents the opportunity. Our Voluntary Disclosure and Registration services include:
- Customer examinations for tax accrued, remitted, and audit status
- Exposure identification and calculation
- Payment remittance
- Prospective agreement negotiation
- Registration and past tax settlement
- Tax minimization strategies
The Ryan team is very knowledgeable and provided accurate information. They are very professional and are always available to answer questions or provide documentation when contacted.
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News & Insights
Integrated End-to-End Tax Services
Ryan is focused on your overall tax performance—providing innovative solutions to the underlying causes of the errors we identify—and creating greater opportunities to measure and improve your efficiency, develop a more strategic approach to tax, and deliver outstanding value to your shareholders.