CHAPTER 34 —TAXES ON CERTAIN INSURANCE POLICIES
Editorial Notes
Prior Provisions
The provisions of a prior
Subchapter A, Issuance of capital stock and certificates of indebtedness by a corporation, comprising sections 4301 to 4305 and 4311 to 4316.
Subchapter B, Sale or transfers of capital stock and certificates of indebtedness of a corporation, comprising sections 4321 to 4324, 4331 to 4333, 4341 to 4345, and 4351 to 4354.
Subchapter C, Conveyances, comprising sections 4361 to 4363.
Subchapter D, Policies issued by foreign insurers, comprising sections 4371 to 4375.
Subchapter E, Miscellaneous provisions applicable to documentary stamp taxes, comprising sections 4381 to 4384.
Subchapters A and B were repealed by
Subchapter C was struck out by
Subchapter D heading was struck out, sections 4371 to 4373 were reenacted without change, section 4374, "liability for tax", was substituted for section 4374, "payment of tax", and section 4375 was struck out by
Subchapter E, section 4381 was repealed by
The subject matter of the prior sections was as follows:
A prior section 4301, acts Aug. 16, 1954, ch. 736,
A prior section 4302, acts Aug. 16, 1954, ch. 736,
A prior section 4303, acts Aug. 16, 1954, ch. 736,
A prior section 4304, acts Aug. 16, 1954, ch. 736,
A prior section 4305, acts Aug. 16, 1954, ch. 736,
A prior section 4311, acts Aug. 16, 1954, ch. 736,
A prior section 4312, acts Aug. 16, 1954, ch. 736,
A prior section 4313, acts Aug. 16, 1954, ch. 736,
A prior section 4314, acts Aug. 16, 1954, ch. 736,
A prior section 4315, acts Aug. 16, 1954, ch. 736,
A prior section 4321, acts Aug. 16, 1954, ch. 736,
A prior section 4322, acts Aug. 16, 1954, ch. 736,
A prior section 4323, acts Aug. 16, 1954, ch. 736,
A prior section 4324, acts Aug. 16, 1954, ch. 736,
A prior section 4331, acts Aug. 16, 1954, ch. 736,
A prior section 4332, acts Aug. 16, 1954, ch. 736,
A prior section 4333, acts Aug. 16, 1954, ch. 736,
A prior section 4341, acts Aug. 16, 1954, ch. 736,
A prior section 4342, acts Aug. 16, 1954, ch. 736,
A prior section 4343, acts Aug. 16, 1954, ch. 736,
A prior section 4344,
A prior section 4345, acts Aug. 16, 1954, ch. 736,
A prior section 4346, acts Aug. 16, 1954, ch. 736,
A prior section 4351, acts Aug. 16, 1954, ch. 736,
A prior section 4352, acts Aug. 16, 1954, ch. 736,
A prior section 4353,
A prior section 4354, acts Aug. 16, 1954, ch. 736,
A prior section 4361, acts Aug. 16, 1954, ch. 736,
A prior section 4362, acts Aug. 16, 1954, ch. 736,
A prior section 4363, acts Aug. 16, 1954, ch. 736,
A prior section 4375, acts Aug. 16, 1954, ch. 736,
A prior section 4381, acts Aug. 16, 1954, ch. 736,
A prior section 4382, acts Aug. 16, 1954, ch. 736,
A prior section 4383,
A prior section 4384, acts Aug. 16, 1954, ch. 736,
Amendments
2010—
1976—
1965—
Statutory Notes and Related Subsidiaries
Effective Dates of Repeal
Repeal of sections 4361 to 4363, 4375, 4382 to 4384 by section 1904(a)(12) of
1 Section numbers editorially supplied.
Subchapter A—Policies Issued By Foreign Insurers
Editorial Notes
Amendments
2010—
§4371. Imposition of tax
There is hereby imposed, on each policy of insurance, indemnity bond, annuity contract, or policy of reinsurance issued by any foreign insurer or reinsurer, a tax at the following rates:
(1) Casualty insurance and indemnity bonds
4 cents on each dollar, or fractional part thereof, of the premium paid on the policy of casualty insurance or the indemnity bond, if issued to or for, or in the name of, an insured as defined in section 4372(d);
(2) Life insurance, sickness, and accident policies, and annuity contracts
1 cent on each dollar, or fractional part thereof, of the premium paid on the policy of life, sickness, or accident insurance, or annuity contract; and
(3) Reinsurance
1 cent on each dollar, or fractional part thereof, of the premium paid on the policy of reinsurance covering any of the contracts taxable under paragraph (1) or (2).
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1989—Par. (2).
1987—Par. (2).
1984—Par. (2).
1976—
1965—
1959—Par. (2).
1958—
1956—Par. (2). Act Mar. 13, 1956, substituted "section 816" for "section 807".
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1959 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
Effective Date of 1956 Amendment
Amendment by act Mar. 13, 1956, applicable only to taxable years beginning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956, set out as a note under
§4372. Definitions
(a) Foreign insurer or reinsurer
For purposes of section 4371, the term "foreign insurer or reinsurer" means an insurer or reinsurer who is a nonresident alien individual, or a foreign partnership, or a foreign corporation. The term includes a nonresident alien individual, foreign partnership, or foreign corporation which shall become bound by an obligation of the nature of an indemnity bond. The term does not include a foreign government, or municipal or other corporation exercising the taxing power.
(b) Policy of casualty insurance
For purposes of section 4371(1), the term "policy of casualty insurance" means any policy (other than life) or other instrument by whatever name called whereby a contract of insurance is made, continued, or renewed.
(c) Indemnity bond
For purposes of this chapter, the term "indemnity bond" means any instrument by whatever name called whereby an obligation of the nature of an indemnity, fidelity, or surety bond is made, continued, or renewed. The term includes any bond for indemnifying any person who shall have become bound or engaged as surety, and any bond for the due execution or performance of any contract, obligation, or requirement, or the duties of any office or position, and to account for money received by virtue thereof, where a premium is charged for the execution of such bond.
(d) Insured
For purposes of section 4371(1), the term "insured" means—
(1) a domestic corporation or partnership, or an individual resident of the United States, against, or with respect to, hazards, risks, losses, or liabilities wholly or partly within the United States, or
(2) a foreign corporation, foreign partnership, or nonresident individual, engaged in a trade or business within the United States, against, or with respect to, hazards, risks, losses, or liabilities within the United States.
(e) Policy of life, sickness, or accident insurance, or annuity contract
For the purpose of section 4371(2), the term "policy of life, sickness, or accident insurance, or annuity contract" means any policy or other instrument by whatever name called whereby a contract of insurance or an annuity contract is made, continued, or renewed with respect to the life or hazards to the person of a citizen or resident of the United States.
(f) Policy of reinsurance
For the purpose of section 4371(3), the term "policy of reinsurance" means any policy or other instrument by whatever name called whereby a contract of reinsurance is made, continued, or renewed against, or with respect to, any of the hazards, risks, losses, or liabilities covered by contracts taxable under paragraph (1) or (2) of section 4371.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1976—Subsec. (a).
Subsec. (c).
1958—Subsec. (d)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
§4373. Exemptions
The tax imposed by section 4371 shall not apply to—
(1) Effectively connected items
Any amount which is effectively connected with the conduct of a trade or business within the United States unless such amount is exempt from the application of section 882(a) pursuant to a treaty obligation of the United States.
(2) Indemnity bond
Any indemnity bond required to be filed by any person to secure payment of any pension, allowance, allotment, relief, or insurance by the United States, or to secure a duplicate for, or the payment of, any bond, note, certificate of indebtedness, war-saving certificate, warrant or check, issued by the United States.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1988—Par. (1).
1976—Par. (1).
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 1988 Amendment
Effective Date of 1976 Amendment
Amendment by
§4374. Liability for tax
The tax imposed by this chapter shall be paid, on the basis of a return, by any person who makes, signs, issues, or sells any of the documents and instruments subject to the tax, or for whose use or benefit the same are made, signed, issued, or sold. The United States or any agency or instrumentality thereof shall not be liable for the tax.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Prior Provisions
For provisions of prior sections 4375, 4381 to 4384, see Prior Provisions note preceding
Amendments
1976—
1965—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1965 Amendment
Determination of Partnership as Continuing or Terminated Partnership
Subchapter B—Insured and Self-Insured Health Plans
§4375. Health insurance
(a) Imposition of fee
There is hereby imposed on each specified health insurance policy for each policy year ending after September 30, 2012, a fee equal to the product of $2 ($1 in the case of policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the policy.
(b) Liability for fee
The fee imposed by subsection (a) shall be paid by the issuer of the policy.
(c) Specified health insurance policy
For purposes of this section:
(1) In general
Except as otherwise provided in this section, the term "specified health insurance policy" means any accident or health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States.
(2) Exemption for certain policies
The term "specified health insurance policy" does not include any insurance if substantially all of its coverage is of excepted benefits described in section 9832(c).
(3) Treatment of prepaid health coverage arrangements
(A) In general
In the case of any arrangement described in subparagraph (B), such arrangement shall be treated as a specified health insurance policy, and the person referred to in such subparagraph shall be treated as the issuer.
(B) Description of arrangements
An arrangement is described in this subparagraph if under such arrangement fixed payments or premiums are received as consideration for any person's agreement to provide or arrange for the provision of accident or health coverage to residents of the United States, regardless of how such coverage is provided or arranged to be provided.
(d) Adjustments for increases in health care spending
In the case of any policy year ending in any fiscal year beginning after September 30, 2014, the dollar amount in effect under subsection (a) for such policy year shall be equal to the sum of such dollar amount for policy years ending in the previous fiscal year (determined after the application of this subsection), plus an amount equal to the product of—
(1) such dollar amount for policy years ending in the previous fiscal year, multiplied by
(2) the percentage increase in the projected per capita amount of National Health Expenditures, as most recently published by the Secretary before the beginning of the fiscal year.
(e) Termination
This section shall not apply to policy years ending after September 30, 2029.
(Added
Editorial Notes
Amendments
2019—Subsec. (e).
§4376. Self-insured health plans
(a) Imposition of fee
In the case of any applicable self-insured health plan for each plan year ending after September 30, 2012, there is hereby imposed a fee equal to $2 ($1 in the case of plan years ending during fiscal year 2013) multiplied by the average number of lives covered under the plan.
(b) Liability for fee
(1) In general
The fee imposed by subsection (a) shall be paid by the plan sponsor.
(2) Plan sponsor
For purposes of paragraph (1) the term "plan sponsor" means—
(A) the employer in the case of a plan established or maintained by a single employer,
(B) the employee organization in the case of a plan established or maintained by an employee organization,
(C) in the case of—
(i) a plan established or maintained by 2 or more employers or jointly by 1 or more employers and 1 or more employee organizations,
(ii) a multiple employer welfare arrangement, or
(iii) a voluntary employees' beneficiary association described in section 501(c)(9), the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan, or
(D) the cooperative or association described in subsection (c)(2)(F) in the case of a plan established or maintained by such a cooperative or association.
(c) Applicable self-insured health plan
For purposes of this section, the term "applicable self-insured health plan" means any plan for providing accident or health coverage if—
(1) any portion of such coverage is provided other than through an insurance policy, and
(2) such plan is established or maintained—
(A) by 1 or more employers for the benefit of their employees or former employees,
(B) by 1 or more employee organizations for the benefit of their members or former members,
(C) jointly by 1 or more employers and 1 or more employee organizations for the benefit of employees or former employees,
(D) by a voluntary employees' beneficiary association described in section 501(c)(9),
(E) by any organization described in section 501(c)(6), or
(F) in the case of a plan not described in the preceding subparagraphs, by a multiple employer welfare arrangement (as defined in section 3(40) of Employee Retirement Income Security Act of 1974), a rural electric cooperative (as defined in section 3(40)(B)(iv) of such Act), or a rural telephone cooperative association (as defined in section 3(40)(B)(v) of such Act).
(d) Adjustments for increases in health care spending
In the case of any plan year ending in any fiscal year beginning after September 30, 2014, the dollar amount in effect under subsection (a) for such plan year shall be equal to the sum of such dollar amount for plan years ending in the previous fiscal year (determined after the application of this subsection), plus an amount equal to the product of—
(1) such dollar amount for plan years ending in the previous fiscal year, multiplied by
(2) the percentage increase in the projected per capita amount of National Health Expenditures, as most recently published by the Secretary before the beginning of the fiscal year.
(e) Termination
This section shall not apply to plan years ending after September 30, 2029.
(Added
Editorial Notes
References in Text
Section 3(40) of Employee Retirement Income Security Act of 1974, referred to in subsec. (c)(2)(F), is classified to
Amendments
2019—Subsec. (e).
§4377. Definitions and special rules
(a) Definitions
For purposes of this subchapter—
(1) Accident and health coverage
The term "accident and health coverage" means any coverage which, if provided by an insurance policy, would cause such policy to be a specified health insurance policy (as defined in section 4375(c)).
(2) Insurance policy
The term "insurance policy" means any policy or other instrument whereby a contract of insurance is issued, renewed, or extended.
(3) United States
The term "United States" includes any possession of the United States.
(b) Treatment of governmental entities
(1) In general
For purposes of this subchapter—
(A) the term "person" includes any governmental entity, and
(B) notwithstanding any other law or rule of law, governmental entities shall not be exempt from the fees imposed by this subchapter except as provided in paragraph (2).
(2) Treatment of exempt governmental programs
In the case of an exempt governmental program, no fee shall be imposed under section 4375 or section 4376 on any covered life under such program.
(3) Exempt governmental program defined
For purposes of this subchapter, the term "exempt governmental program" means—
(A) any insurance program established under title XVIII of the Social Security Act,
(B) the medical assistance program established by title XIX or XXI of the Social Security Act,
(C) any program established by Federal law for providing medical care (other than through insurance policies) to individuals (or the spouses and dependents thereof) by reason of such individuals being members of the Armed Forces of the United States or veterans, and
(D) any program established by Federal law for providing medical care (other than through insurance policies) to members of Indian tribes (as defined in section 4(d) of the Indian Health Care Improvement Act).
(c) Treatment as tax
For purposes of subtitle F, the fees imposed by this subchapter shall be treated as if they were taxes.
(d) No cover over to possessions
Notwithstanding any other provision of law, no amount collected under this subchapter shall be covered over to any possession of the United States.
(Added
Editorial Notes
References in Text
The Social Security Act, referred to in subsec. (b)(3)(A), (B), is act Aug. 14, 1935, ch. 531,
Section 4(d) of the Indian Health Care Improvement Act, referred to in subsec. (b)(3)(D), is classified to