20-401.07 - Arizona Statutes

20-401.07. Premium receipts tax on industrial insureds contracting with unauthorized insurer; definitions A. Every industrial insured under a contract procured from an unauthorized insurer shall pay to the director before March 1 next succeeding the calendar year in which the insurance was so effectuated, continued or renewed a premium receipts tax of three per cent of the gross premiums, less premiums returned on account of cancellation or reduction of premium, charged for insurance on subjects resident, located or to be performed in this state. Such insurance, whether procured through negotiation or an application, in whole or in part occurring or made within or outside of this state, or for which premiums in whole or in part are remitted directly or indirectly from within or outside of this state, shall be deemed to be insurance effectuated or continued in this state. If a contract covers risks or exposures only partly in this state, the tax payable shall be computed on the portions of the premium that are properly allocable to the risks or exposures located in this state. Proration of premium taxes due from an industrial insured under a contract procured from an unauthorized insurer having property in states other than Arizona shall be determined by rules adopted by the director using the following criteria where applicable: 1. Percentage of physical assets in Arizona. 2. Percentage of employee payroll in Arizona. 3. Percentage of sales in Arizona. 4. Percentage of taxable income reportable in Arizona. B. For purposes of this section: 1. "Industrial insured" means an insured that applies for or procures any insurance that is subject to article 4.1 of this chapter through the use of a risk manager and that meets at least two of the following criteria: (a) Has aggregate annual gross premiums for insurance on all property and casualty risks that are subject to article 4.1 of this chapter totaling at least one hundred thousand dollars as of the preceding fiscal year end of the industrial insured. (b) Possesses a net worth of over ten million dollars as of the preceding fiscal year end of the industrial insured as verified by a certified public accountant. (c) Has net revenues or sales exceeding twenty-five million dollars as of the preceding fiscal year end of the industrial insured as verified by a certified public accountant. (d) Has more than eighty full-time employees or equivalent per individual company or one hundred full-time employees or equivalent per holding company system as of the date the policy is issued. 2. "Risk manager" means a full-time employee of the industrial insured or a third party consultant who is retained by the industrial insured, who provides skilled services in loss prevention, loss reduction, risk and insurance coverage analysis and the purchase of insurance and who possesses at least one of the following qualifications: (a) A baccalaureate or higher degree in risk management that is issued by an accredited college or university. (b) A designation as a chartered property and casualty underwriter that is issued by an insurance institute. (c) A designation as a certified insurance counselor that is issued by a society of certified insurance counselors. (d) A designation as an associate in risk management that is issued by an insurance institute. (e) A designation as a certified risk manager that is issued by a national alliance for insurance education and research. (f) A designation as a fellow in risk management that is issued by a global risk management institute. (g) Any other similar qualification that, before the employee or consultant applies for or procures any insurance that is subject to article 4.1 of this chapter, the director determines is sufficient, other than a license as an insurance producer pursuant to article 3 of this chapter.