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AN ACT concerning insurance; relating to the taxation of annuities; amending
     K.S.A. 40-252 and repealing the
  existing section.
Be it enacted by the Legislature of the State of Kansas:
  Section 1.  K.S.A. 40-252 is hereby amended to read as follows: 40-252. Every
     insurance company or fra-
ternal benefit society organized under the laws of this state or doing business
     in this state shall pay to the
commissioner of insurance fees and taxes specified in the following schedule:
                                       A
                     Insurance companies organized under
                           the laws of this state:
1.  Capital stock insurance companies and mutual legal reserve life insurance
     companies:
Filing application for sale of stock or certificates of indebtedness   $25
Admission fees:
Examination of charter and other documents  500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
2.  Mutual life, accident and health associations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
3.  Mutual fire, hail, casualty and multiple line insurers and reciprocal or
     interinsurance exchanges:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
  In addition to the above fees and as a condition precedent to the
     continuation of the certificate of authority
provided in this code, all such companies shall pay a fee of $2 for each agent
     certified by the company and shall
also pay a tax annually upon all premiums received on risk located in this state
     at the rate of 1% per annum
less (1) for tax years prior to 1984, any taxes paid on business in this state
     pursuant to the provisions of K.S.A.
40-1701 to 40-1707, inclusive, and 75-1508 and amendments thereto and (2) for
     tax years 1984 and thereafter,
any taxes paid on business in this state pursuant to the provisions of K.S.A.
     75-1508 and amendments thereto
and the amount of the firefighters relief tax credit determined by the
     commissioner of insurance. The amount
of the firefighters relief tax credit for a company for the current tax year
     shall be determined by the commis-
sioner of insurance by dividing (A) the total amount of credits against the 1%
     tax imposed by this section for
taxes paid by all such companies on business in this state under K.S.A. 40-1701
     to 40-1707, inclusive, and
amendments thereto for tax year 1983, by (B) the total amount of taxes paid by
     all such companies on business
in this state under K.S.A. 40-1703 and amendments thereto for the tax year
     immediately preceding the current
tax year, and by multiplying the result so obtained by (C) the amount of taxes
     paid by the company on business
in this state under K.S.A. 40-1703 and amendments thereto for the current tax
     year.
  Funds accepted prior to January 1, 1997, by a life insurer under an agreement
     which provides for an accu-
mulation of funds to purchase taxable annuities at later dates shall be taxable
     premiums either when received
or when actually applied to the purchase of annuities, at the option of the
     insurer. If the funds are declared
upon receipt, any interest or other gain that accrues thereon shall not be
     taxable as premium income, but if
the funds are declared when applied to the purchase of annuities, the premium
     tax shall be paid on the entire
amount so applied. Any such funds declared upon receipt which are thereafter
     withdrawn before application
to the purchase of annuities may be deducted from tax base as ``premiums''
     returned on account of cancellations.
  In the computation of the gross premiums all such companies shall be entitled
     to deduct any premiums
returned on account of cancellations, all premiums received for reinsurance from
     any other company authorized
to do business in this state, dividends returned to policyholders and premiums
     received in connection with the
funding of a pension, deferred compensation, annuity or profit-sharing plan
     qualified or exempt under sections
401, 403, 404, 408, 457 or 501 of the United States internal revenue code of
     1986. Should any such company
remove or maintain, or both, either their home, principal or executive office or
     offices from this state, every
such company shall be subject to the provisions of subsection D of this section.
                                       B
                    Fraternal benefit societies organized
                        under the laws of this state:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
                                       C
Mutual nonprofit hospital service corporations, nonprofit medical service
     corporations, nonprofit dental service corporations, nonprofit
optometric service corporations and nonprofit pharmacy service corporations
     organized under the laws of this state:
1.  Mutual nonprofit hospital service corporations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
2.  Nonprofit medical service corporations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
3.  Nonprofit dental service corporations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
4.  Nonprofit optometric service corporations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
5.  Nonprofit pharmacy service corporations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
  In addition to the above fees and as a condition precedent to the
     continuation of the certificate of authority,
provided in this code, every corporation or association shall pay annually to
     the commissioner of insurance a
privilege fee in an amount equal to 1% per annum of the total of all premiums,
     subscription charges, or any
other term which may be used to describe the charges made by such corporation or
     association to subscribers
for hospital, medical or other health services or indemnity received during the
     preceding year. In such com-
putations all such corporations or associations shall be entitled to deduct any
     premiums or subscription charges
returned on account of cancellations and dividends returned to members or
     subscribers.
                                       D
                   Insurance companies organized under the
               laws of any other state, territory or country:
1.  Capital stock insurance companies and mutual legal reserve life insurance
     companies:
Filing application for sale of stock or certificates of indebtedness  $25
Admission fees:
Examination of charter and other documents  500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
  In addition to the above fees all such companies shall pay $5 for each agent
     certified by the company, except
as otherwise provided by law.
  As a condition precedent to the continuation of the certificate of authority,
     provided in this code, every
company organized under the laws of any other state of the United States or of
     any foreign country shall pay a
tax upon all premiums received during the preceding year at the rate of 2% per
     annum.
  Funds accepted prior to January 1, 1997, by a life insurer under an agreement
     which provides for an accu-
mulation of funds to purchase taxable annuities at later dates shall be taxable
     premiums either when received
or when actually applied to the purchase of annuities, at the option of the
     insurer. If the funds are declared
upon receipt, any interest or other gain that accrues thereon shall not be
     taxable as premium income, but if
the funds are declared when applied to the purchase of annuities, the premium
     tax shall be paid on the entire
amount so applied. Any such funds declared upon receipt which are thereafter
     withdrawn before application
to the purchase of annuities may be deducted from tax base as ``premiums''
     returned on account of cancellations.
  In the computation of the gross premiums all such companies shall be entitled
     to deduct any premiums
returned on account of cancellations, dividends returned to policyholders and
     all premiums received for rein-
surance from any other company authorized to do business in this state and
     premiums received in connection
with the funding of a pension, deferred compensation, annuity or profit-sharing
     plan qualified or exempt under
sections 401, 403, 404, 408, 457 or 501 of the United States internal revenue
     code of 1986.
2.  Mutual life, accident and health associations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
  In addition to the above fees, every such company organized under the laws of
     any other state of the United
States shall pay $5 for each agent certified by the company, and shall pay a tax
     annually upon all premiums
received at the rate of 2% per annum.
  Funds accepted prior to January 1, 1997, by a life insurer under an agreement
     which provides for an accu-
mulation of funds to purchase taxable annuities at later dates shall be taxable
     premiums either when received
or when actually applied to the purchase of annuities, at the option of the
     insurer. If the funds are declared
upon receipt, any interest or other gain that accrues thereon shall not be
     taxable as premium income, but if
the funds are declared when applied to the purchase of annuities, the premium
     tax shall be paid on the entire
amount so applied. Any such funds declared upon receipt which are thereafter
     withdrawn before application
to the purchase of annuities may be deducted from tax base as ``premiums''
     returned on account of cancellations.
  In the computation of the gross premiums all such companies shall be entitled
     to deduct any premiums
returned on account of cancellations, dividends returned to policyholders and
     all premiums received for rein-
surance from any other company authorized to do business in this state and
     premiums received in connection
with the funding of a pension, deferred compensation, annuity or profit-sharing
     plan qualified or exempt under
sections 401, 403, 404, 408, 457 or 501 of the United States internal revenue
     code of 1986.
3.  Mutual fire, casualty and multiple line insurers and reciprocal or
     interinsurance exchanges:
Admission fees:
Examination of charter and other documents and issuance of certificate of
     authority $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
  In addition to the above fees, every such company or association organized
     under the laws of any other state
of the United States shall pay a fee of $5 for each agent certified by the
     company and shall also pay a tax annually
upon all premiums received at the rate of 2% per annum. In the computation of
     the gross premiums all such
companies shall be entitled to deduct any premiums returned on account of
     cancellations, all premiums received
for reinsurance from any other company authorized to do business in this state,
     and dividends returned to
policyholders.
                                       E
            Fraternal benefit societies organized under the laws
                  of any other state, territory or country:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
                                       F
Mutual nonprofit hospital service corporations, nonprofit medical service
     corporations, nonprofit dental service corporations, nonprofit
optometric service corporations and nonprofit pharmacy service corporations
     organized under the laws of any other state, territory or
country:
1.  Mutual nonprofit hospital service corporations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
2.  Nonprofit medical service corporations, nonprofit dental service
     corporations, nonprofit optometric service corporations and nonprofit
pharmacy service corporations:
Admission fees:
Examination of charter and other documents $500
Filing annual statement                100
Certificate of authority                10
Annual fees:
Filing annual statement                100
Continuation of certificate of authority   10
  In addition to the above fees and as a condition precedent to the
     continuation of the certificate of authority,
provided in this code, every corporation or association shall pay annually to
     the commissioner of insurance a
privilege fee in an amount equal to 2% per annum of the total of all premiums,
     subscription charges, or any
other term which may be used to describe the charges made by such corporation or
     association to subscribers
in this state for hospital, medical or other health services or indemnity
     received during the preceding year. In
such computations all such corporations or associations shall be entitled to
     deduct any premiums or subscription
charges returned on account of cancellations and dividends returned to members
     or subscribers.
                                       G
                   All insurers shall pay a fee of $10 for
              issuance of an amended certificate of authority.
  For the purpose of insuring the collection of the tax upon premiums,
     assessments and charges as set out in
subsection A, C, D or F, every insurance company, corporation or association
     shall at the time it files its annual
statement, as required by the provisions of K.S.A. 40-225, and amendments
     thereto, make a return, verified by
affidavits of its president and secretary or other chief officers, to the
     commissioner of insurance, stating the
amount of all premiums, assessments and charges received by the companies or
     corporations in this state,
whether in cash or notes, during the year ending on the December 31 next
     preceding.
  Commencing in 1985 and annually thereafter the estimated taxes shall be paid
     as follows:  On or before June
15 and December 15 of such year an amount equal to 50% of the full amount of the
     prior year's taxes as
reported by the company shall be remitted to the commissioner of insurance. As
     used in this paragraph, ``prior
year's taxes'' includes (1) taxes assessed pursuant to this section for the
     prior calendar year, (2) fees and taxes
assessed pursuant to K.S.A. 40-253, and amendments thereto, for the prior
     calendar year, and (3) taxes paid
for maintenance of the department of the state fire marshal pursuant to K.S.A.
     75-1508, and amendments
thereto, for the prior calendar year.
  Upon the receipt of such returns the commissioner of insurance shall verify
     the same and assess the taxes
upon such companies, corporations or associations on the basis and at the rate
     provided herein and the balance
of such taxes shall thereupon become due and payable giving credit for amounts
     paid pursuant to the preceding
paragraph, or the commissioner shall make a refund if the taxes paid in the
     prior June and December are in
excess of the taxes assessed.
                                       H
  The fee prescribed for the examination of charters and other documents shall
     apply to each company's initial
application for admission and shall not be refundable for any reason.
                                    I
  On and after January 1, 1997, premiums received by a life insurer for the
     purchase of any annuity contract
shall no longer be deemed to be taxable premiums and shall no longer be subject
     to the tax imposed by this
section.
  Sec. 2.  K.S.A. 40-252 is hereby repealed.
  Sec. 3.  This act shall take effect and be in force from and after its
     publication in the statute book.