Tax Rates and Charges

Tax Rates and Charges (G.S. 105-228.5, G.S. 58-6-25)

Tax rates and charges for insurers taxed under G.S. 105-228.5 are as follows:

  • Workers’ Compensation -- 2.50%

  • Other taxable contracts -- 1.90%

  • Property coverage contracts -- .74%**

  • Article 65 Corporations -- 1.90%

  • Health Maintenance Organizations -- 1.90%

  • Insurance Regulatory Charge (2015 - 2016) -- 6.50%*

*Subject to change each year and is established by the General Assembly based on a proposed percentage rate submitted by the NC Department of Insurance sufficient to defray the estimated cost of the operations of the NC Department of Insurance for each upcoming fiscal year. This rate also applies to tax years 2016 and 2017.

**The additional tax on property coverage contracts is imposed on ten percent (10%) of the gross premiums from policies providing coverage for automobile physical damage and one hundred percent (100%) of the gross premium from all other property coverage contracts including policies providing coverage for wind damage (see G.S. 105-228.5(d)(3) for definitions).

Tax Rates and Charges for Captive Insurance Companies (G.S. 105-228.4A)

Tax rates for captive insurance companies taxed under G.S. 105-228.4A are as follows:

Direct Premiums

  • Up to $20,000,000 -- 0.400%

  • $20,000,000 and more -- 0.300%

Assumed Reinsurance Premiums

  • Up to $20,000,000 -- 0.225%

  • $20,000,000 to $40,000,000 -- 0.150%

  • $40,000,000 to $60,000,000 -- 0.050%

  • $60,000,000 and over -- 0.025%

The minimum tax is $5,000 and the maximum is $100,000 for captives filing as stand-alone captives unless the captive is a protected cell captive insurance company with more than 10 cells. The minimum and maximum tax amounts for a protected cell captive with more than 10 cells are $10,000 and $200,000, respectively.

The minimum tax is $5,000 and the maximum is $100,000 for a group of captive insurance companies under common ownership and control as determined by the North Carolina Department of Insurance filing as a single captive unless the group includes one or more special purpose financial captive insurance companies. If the consolidated group includes one or more special purpose captive insurance companies, the minimum is $5,000 for the group and the maximum is $200,000 since the maximum is $100,000 for the members of the group that are special purpose captives and $100,000 for the members that are not special purpose financial captives.