California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 3 - Insurers
Article 6.2 - Reporting and Filing Premium Taxes
Section 2327 - Definitions
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
Unless the context otherwise requires, the definitions set forth in this section govern the construction of this article.
(a) Accrual basis. Accrual basis accounting is a method of calculating premium tax based upon premiums, as identified on Schedule T of the insurer's Annual Statement, that are written by the insurer during a given tax year.
(b) Cash Basis. Cash basis accounting is a method of calculating premium tax based upon premiums that are received and collected by the insurer during a given tax year, less any premiums returned during the same tax year.
(c) Collected Direct Premiums. For purposes of this Article, the term Collected Direct Premiums or premiums received is defined as that portion of premiums directly written by the Insurer, including any consideration that was due on or before the end of the tax year for which the insurer is filing, and for which the insurer has received payment.
(d) Direct Premiums. Direct Premiums means premiums written and/or received in transactions conducted directly with the insured, but does not include premiums written on reinsurance business.
(e) Gross Premiums. For purposes of this Article, the term gross premiums as referenced in California Revenue and Taxation Code section 12221, does not include premiums received for reinsurance, ocean marine insurance, title insurance, or surplus line transactions.
(f) Insurer. For purposes of this Article, the term Insurer is defined by California Insurance Code Section 23, and includes those listed in California Revenue and Taxation Code Section 12003, however, it does not include those transacting ocean marine insurance or title insurance.
(g) NAIC. The NAIC is the National Association of Insurance Commissioners, which is an organization of insurance regulators from the 50 states, the District of Columbia and the five U.S. territories.
(h) NAIC Annual Statement Schedule T. The NAIC Annual Statement Schedule T is an NAIC schedule found in the NAIC Annual Statement Blanks that is intended to exhibit the amount of premiums written, allocated by states and territories.
(i) Open tax year. An open tax year is any taxable year that is not covered by the limitations found in California Revenue and Taxation Code Section 12978.
(j) Premium Collection Activity. For purposes of this Article, the term Premium Collection Activity includes any or all of the following: insurance lines and types, billing plans, payment plans, and bad debt percentage.
(k) Uncollected Direct Premiums. For purposes of this Article, the term Uncollected Direct Premiums is defined as that portion of premiums and consideration that was directly written by the Insurer and was due on or before the end of the tax year for which the insurer is filing, but for which the insurer has not received payment.
1. New article 6.2 (sections 2327-2327.2) and section filed 8-22-2012; operative 9-21-2012 (Register 2012, No. 34).
Note: Authority cited: Section 13170, Revenue and Taxation Code. Reference: Article XIII, Section 28, California Constitution; Sections 12001, 12003, 12201, 12221, 12231, 12232, 12302, 12303, 12304, 12421 and 12422, Revenue and Taxation Code; Sections 19, 20, 21, 24, 28, 47, 736, 1530 and 12740, Insurance Code.
