Section 400-A:33 Tax on Marine Underwriting Profits.


   I. Within one month after receiving notice from the commissioner of the amount thereof, every insurer authorized to do the business of ocean marine insurance in this state shall, with respect to marine insurance written within the state upon hulls, freights or disbursements, or upon goods, wares, merchandise and all other personal property and interests, therein, in course of exportation from any country, importation into any country, or transportation coastwise, including transportation by land or water from point of origin to final destination, in respect to, appertaining to, or in connection with, any and all risks or perils of navigation, transit or transportation, any portion of which exportation, importation, transportation, navigation, transit or shipment is upon any ocean, and upon the property while being prepared for and while awaiting shipment, and during any delays, storage, transshipment or reshipment incident thereto, including war risks and marine builders risks, pay to the state treasurer a tax of 5 percent on its taxable underwriting profit, ascertained as hereinafter provided, from such insurance written in this state.
   II. The underwriting profit on such insurance written within this state shall be that proportion of the total underwriting profit of such insurer from such insurance written within the United States, which the amount of net premiums of the insurer from such insurance written within this state bears to the amount of net premiums of such insurer from such insurance written within the United States.
   III. The term ""underwriting profit'' as used in this section shall mean the amount arrived at by deducting from the net earned premiums on such marine insurance contracts written within the United States during the taxable year, meaning thereby the calendar year next preceding the date on which such tax is due, the following items:
      (a) Net losses incurred, meaning gross losses incurred during such calendar year under such marine insurance contracts written within the United States, less reinsurance claims collected or collectible and less net salvages or recoveries collected or collectible from any source applicable to the corresponding losses under such contracts;
      (b) Net expenses incurred in connection with such marine insurance contracts, including all state and federal taxes in connection therewith; but in no event shall the aggregate amount of such net expenses deducted exceed 40 percent of the net premiums on such marine insurance contracts, ascertained as hereinafter provided; and
      (c) Net dividends paid or credited to policyholders on such marine insurance contracts.
   IV. In determining the amount of such tax, net earned premiums on such marine insurance contracts written within the United States during the taxable year shall be arrived at as follows: from gross premiums written on such contracts during the taxable year deduct any and all return premiums, premiums on policies not taken, premiums paid for reinsurance of such contracts and net unearned premiums on all such outstanding marine insurance contracts at the end of the taxable year; and add to such an amount net unearned premiums on such outstanding marine insurance contracts at the end of the taxable year; and add to such an amount net unearned premiums on such outstanding marine insurance contracts at the end of the calendar year next preceding the taxable year.
   V. In determining the amount of such tax net expenses incurred shall be determined as the sum of the following:
      (a) Specific expenses incurred on such marine insurance business, consisting of all commissions, agency expenses, taxes, licenses, fees, loss adjustment expenses, and all other expenses incurred directly and specifically in connection with such business, less recoveries or reimbursements on account of or in connection with such commissions or other expenses collected or collectible because of reinsurance or from any other source.
      (b) General expenses incurred on such marine insurance business, consisting of that proportion of general or overhead expenses incurred in connection with such business which the net premiums on such marine insurance written during the taxable year bear to the total net premiums written by such insurer from all classes of insurance written by it during the taxable year. Within the meaning of this paragraph, general or overhead expenses shall include salaries of officers and employees, printing and stationery, all taxes of this state and of the United States, except as included in RSA 400-A:33, V(a), and all other expenses of such insurer not included in said subparagraph after deducting expenses specifically chargeable to any or all other classes of insurance business.
   VI. Every insurer transacting such marine insurance business in this state shall file, on or before the first day of May in each year, with the insurance commissioner, and in the form prescribed by him, a report of all items hereinbefore enumerated pertaining to its marine insurance business. Every insurer which has been writing such marine insurance contracts in this state for 3 years shall furnish the insurance commissioner a statement of all of the aforementioned items, in the form prescribed by him, for each of the 3 calendar years preceding the date on which the report is due. An insurer which has not been writing such marine insurance contracts within this state for 3 years shall furnish to the insurance commissioner a report of all the aforementioned items for each of the calendar years during which it has written such marine insurance contracts in this state. If the insurance commissioner finds the report of the reporting insurer correct, he shall, if the insurer has transacted such marine insurance business in the state for 3 years,
      (a) ascertain the average annual underwriting profit, as hereinbefore defined, derived by the insurer from such marine insurance business written within the United States during the 3 calendar years next preceding the date when the report required hereunder is due;
      (b) ascertain the proportion which the average annual net premium of the insurer from such marine insurance written by it in this state during the said preceding 3 calendar years bears to the average annual net premiums from such marine insurance written by it within the United States during the same 3 years;
      (c) compute an amount of 5 per centum on this proportion of the aforementioned average annual underwriting profit of the insurer from such marine insurance;
      (d) charge the amount of tax thus computed to such insurer as a tax upon such marine insurance written by it in this state during the calendar year next preceding the date when the report required hereunder is due; and
      (e) notify the insurer of the amount of said tax.
   VII. The insurance commissioner shall each year compute the tax upon the average annual underwriting profit of such insurer from such marine insurance during the 3 calendar years immediately preceding the date upon which the report, required hereunder, is due and he shall notify each insurer of the amount of the same; provided, however, that in the case of an insurer which has not written such marine insurance in this state for 3 years, the commissioner shall, until such insurer has transacted such business in this state for that number of years, compute a tax of 5 percent on the taxable underwriting profit of such insurer from such marine insurance business written in this state during the taxable year, ascertained as hereinbefore provided; but after such insurer has written such marine insurance business within this state during 3 calendar years, an adjustment shall be made on the 3-year average basis by ascertaining the amount of tax payable in accordance with the average 3 years basis hereinbefore outlined. Any refund due to an insurer as a result of such adjustment may be paid by the state treasurer to such insurer upon receipt of notice from the commissioner that such refund is due the insurer.

Source. 1971, 244:1, eff. Aug. 17, 1971.