August 26, 2021
Washington Captive Premium Taxes
As a reminder, starting in 2021, any captive insurance company that has policyholders in the State of Washington may be required to pay a premium tax to the state. This means any entity acting as an eligible captive insurer and issuing policies that cover Washington risks for their captive owner, the captive owner’s other affiliates, or both.
These companies must register with the Office of the Insurance Commissioner (OIC) by September 9, 2021 or within 120 days after first issuing a policy that covers Washington risks, whichever is later. The registration fee is $2,500, and tax on Washington premiums is 2%.
Not all captive insurers with policyholders in Washington will be required to register. Washington describes an eligible captive insurer as meeting all of the following criteria:
- Licensed as a captive insurer by the jurisdiction in which it is domiciled
- Partially or wholly owned by a corporation, company, nonprofit, or a public institution of higher education
- Insures the risk of its captive owner, the owner’s affiliates, or both
- Has one or more insureds whose principal place of business is the State of Washington
- Has assets that exceed liabilities by $1 million and can pay its debts when they come due, as verified by audited financial statements and prepared by an independent certified accountant
If you have any questions on this new requirement or need assistance in filing please contact Allan Autry or Andrew Kulig through our contact form.