INSURANCE CODE

TITLE 3. DEPARTMENT FUNDS, FEES, AND TAXES

SUBTITLE B. INSURANCE PREMIUM TAXES

CHAPTER 222. LIFE, HEALTH, AND ACCIDENT INSURANCE PREMIUM TAX

Sec. 222.001.  APPLICABILITY OF CHAPTER.

Text of subsection effective until April 01, 2025

(a)  This chapter applies to any insurer, including a group hospital service corporation, any health maintenance organization, and any managed care organization that receives gross premiums or revenues subject to taxation under Section 222.002, including companies operating under Chapter 841, 842, 843, 861, 881, 882, 883, 884, 941, 942, 982, or 984, Insurance Code, Chapter 533, Government Code, or Title XIX of the federal Social Security Act.

Text of subsection effective on April 01, 2025

(a)  This chapter applies to any insurer, including a group hospital service corporation, any health maintenance organization, and any managed care organization that receives gross premiums or revenues subject to taxation under Section 222.002, including companies operating under Chapter 841, 842, 843, 861, 881, 882, 883, 884, 941, 942, 982, or 984, Insurance Code, Chapter 540 or 540A, Government Code, as applicable, or Title XIX of the federal Social Security Act.
(b)  This chapter does not apply to:
(1)  a fraternal benefit society, including a fraternal benefit society operating under Chapter 885;
(2)  a local mutual aid association operating under Chapter 886;  or
(3)  a society that limits its membership to one occupation.
(c)  For purposes of computing the tax imposed by this chapter, a managed care organization is treated in the same manner as a health maintenance organization.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.
Amended by: 
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.002(a), eff. September 1, 2005.
Acts 2023, 88th Leg., R.S., Ch. 769 (H.B. 4611), Sec. 2.118, eff. April 1, 2025.

Sec. 222.002.  TAX IMPOSED.  (a)  An annual tax is imposed on:
(1)  each insurer that receives gross premiums subject to taxation under this section;  and
(2)  each health maintenance organization that receives gross revenues from the sale of health maintenance certificates or contracts.
(b)  Except as otherwise provided by this section, in determining an insurer's taxable gross premiums or a health maintenance organization's taxable gross revenues, the insurer or health maintenance organization shall include the total gross amounts of premiums, membership fees, assessments, dues, revenues, and other considerations received by the insurer or health maintenance organization in a calendar year from any kind of health maintenance organization certificate or contract or insurance policy or contract covering risks on individuals or groups located in this state and arising from the business of a health maintenance organization or the business of life insurance, accident insurance, health insurance, life and accident insurance, life and health insurance, health and accident insurance, life, health, and accident insurance, including variable life insurance, credit life insurance, and credit accident and health insurance for profit or otherwise or for mutual benefit or protection.
(c)  The following are not included in determining an insurer's taxable gross premiums or a health maintenance organization's taxable gross revenues:
(1)  returned premiums or revenues;
(2)  dividends applied to purchase paid-up additions to insurance or to shorten the endowment or premium payment period;
(3)  premiums received from an insurer for reinsurance;
(4)  premiums or revenues received from the treasury of the United States for insurance or benefits contracted for by the federal government  in accordance with or in furtherance of Title XVIII of the Social Security Act (42 U.S.C. Section 1395c et seq.) and its subsequent amendments;
(5)  premiums or revenues paid on group health, accident, and life policies or contracts in which the group covered by the policy or contract consists of a single nonprofit trust established to provide coverage primarily for employees of:
(A)  a municipality, county, or hospital district in this state; or
(B)  a county or municipal hospital, without regard to whether the employees are employees of the county or municipality or of an entity operating the hospital on behalf of the county or municipality; or
(6)  premiums or revenues excluded by another law of this state.
(d)  For purposes of Subsection (c)(3), a stop-loss or excess loss insurance policy issued to a health maintenance organization is considered reinsurance.  In determining an insurer's taxable gross premiums or a health maintenance organization's taxable gross revenues, an insurer or health maintenance organization is not entitled to a deduction for premiums paid for reinsurance.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.
Amended by: 
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.002(b), eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch. 932 (H.B. 3315), Sec. 2, eff. June 15, 2007.

Sec. 222.003.  TAX RATES.  (a)  Except as provided by Subsection (b), the rate of the tax imposed by this chapter on an insurer is 1.75 percent of the insurer's taxable gross premiums received during a calendar year.
(b)  The rate of the tax imposed by this chapter on an insurer that receives taxable gross premiums from the business of life insurance is:
(1)  0.875 percent of the first $450,000 of taxable gross premiums received during a calendar year from the business of life insurance;  and
(2)  1.75 percent of the remaining taxable gross premiums received during that calendar year from the business of life insurance.
(c)  The rate of the tax imposed by this chapter on a health maintenance organization is:
(1)  0.875 percent of the first $450,000 of taxable gross revenues received during a calendar year for the issuance of health maintenance certificates or contracts;  and
(2)  1.75 percent of the remaining taxable gross revenues received during that calendar year for the issuance of health maintenance certificates or contracts.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.

Sec. 222.004.  TAX DUE DATES.  (a)  The total tax imposed by this chapter is due and payable not later than:
(1)  March 1 after the end of the calendar year for which the tax is due;
(2)  the date the annual statement for the insurer or health maintenance organization is required to be filed with the commissioner after the end of the calendar year for which the tax is due;  or
(3)  another date prescribed by the comptroller.
(b)  An insurer or health maintenance organization that had a net tax liability for the previous calendar year of more than $1,000 shall make semiannual prepayments of tax on March 1 and August 1.  The tax paid on each date must be equal to 50 percent of the total amount of tax the insurer or health maintenance organization paid under this chapter for the previous calendar year.  If the insurer or health maintenance organization did not pay a tax under this chapter during the previous calendar year, the tax paid on each date must be equal to the tax that would be owed on the aggregate of the taxable gross premiums or taxable gross revenues for the two previous calendar quarters.
(c)  The comptroller may refund any overpayment of taxes that results from the semiannual prepayment system prescribed by this section.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.

Sec. 222.005.  TAX REPORT.  (a)  An insurer or health maintenance organization liable for the tax imposed by this chapter must file annually with the comptroller a tax report on a form prescribed by the comptroller.
(b)  The tax report is due on the date the tax is due under Section 222.004(a).
(c)  The comptroller may require the insurer or health maintenance organization to file any additional relevant information that is reasonably necessary to verify the amount of tax due.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.

Sec. 222.006.  CHANGE IN DUE DATES.  (a)  The comptroller by rule may change the dates for reporting and paying taxes under this chapter to improve operating efficiencies within the agency.
(b)  A change by the comptroller in a reporting or payment date must retain the system of semiannual prepayments prescribed by Section 222.004.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.

Sec. 222.007.  CREDIT FOR FEES PAID.  (a)  Except as otherwise provided by this subsection, an insurer or health maintenance organization is entitled to a credit on the amount of tax due under this chapter for all examination and evaluation fees paid to this state during the calendar year for which the tax is due.  An insurer is not entitled to a credit on the amount of tax due under this chapter for fees paid for valuing life insurance policies.  The limitations provided by Sections 803.007(1) and (2)(B) for a domestic insurance company apply to a foreign insurance company.
(b)  The credit provided by this section is in addition to any other credit authorized by statute.
(c)  Expired.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.
Amended by: 
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.003(a), eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch. 1039 (H.B. 1849), Sec. 2, eff. September 1, 2007.
Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 2.02, eff. September 28, 2011.

Sec. 222.008.  FAILURE TO PAY TAXES.  An insurer or health maintenance organization that fails to pay all taxes imposed by this chapter is subject to Section 203.002.
Added by Acts 2003, 78th Leg., ch. 1274, Sec. 1, eff. April 1, 2005.