California Form 570 Draft - Nonadmitted Insurance Tax Return

Instructions for Form 570

Nonadmitted Insurance Tax Return

References in these instructions are to the California Revenue and Taxation Code (R&TC) and the California Insurance Code.

What’s New

• Multistate risk – means a risk covered by a

• Gross premiums on businesses governed by

nonadmitted insurer with insured exposures in

provisions of Insurance Code Section 1760.5

Assembly Bill (AB) 315, effective July 21, 2011,

more than one state.

(reinsurance of the liability of an admitted

conforms California law to the Nonadmitted

insurer and marine, aircraft, and interstate

The total gross premium paid or to be paid for

and Reinsurance Reform Act (NRRA) that is

railroad insurance).

all nonadmitted insurance placed in a single

part of the Dodd-Frank Wall Street Reform and

• Insurance coverage for which a tax on the

transaction with one underwriter or group of

Consumer Protection Act of 2010, enacted last

gross premium is due or has been paid by risk

underwriters, whether in one or more policies,

year by the federal government and authorizes the

retention groups pursuant to Insurance Code

in that calendar quarter during which the taxable

collection of tax on 100 percent of the premiums

Section 132.

insurance contract or contracts took effect or

of California home state insured policies. Thus,

were renewed, is now the entire gross premium

Agents or brokers with a valid power of attorney

if a person is determined to be a California home

charged on all nonadmitted insurance for the

to file a return on behalf of the insured must enter

state insured, then all premiums related to all

California home state insured.

the requested information in the space below

insurance policies obtained from a nonadmitted

line 15.

insurer are subject to tax, whether or not the

General Information

insurance coverage is associated with California.

C Tax Rate

The NRRA only allows one state to tax a home

A user of this form may have to file up to four

state insured, so proration of premiums among

The tax rate is three percent (.03). This rate is

Form 570 tax returns in one year if the user

the states for taxation no longer occurs.

applied to the gross premium paid or to be paid,

purchases nonadmitted insurance contracts in

less premiums returned because of cancellation

Go to ftb.ca.gov and search for nonadmitted

each of the quarters.

or reduction of premium on which a tax has been

insurance tax for information about:

Round Cents to Dollars – Round cents to the

paid. Do not include a stamping fee.

• California Revenue and Taxation Code

nearest whole dollar. For example, round $50.50

• California Insurance Code

up to $51 or round $25.49 down to $25. If you

D When and Where to File

• AB 315

do not round, the Franchise Tax Board (FTB) will

• Tax forms and publications

disregard the cents.

File Form 570-A on or before the first day of the

third month following the close of any calendar

Go to ftb.ca.gov and search for subscription

Private Mail Box (PMB) – Include the PMB in

quarter during which a nonadmitted insurance

services to receive information by email.

the address field. Write “PMB” first, then the box

contract took effect or was renewed:

number. Example: 111 Main Street PMB 123.

Definitions:

Contract effective date

Return due date

Foreign Address – Enter the information in the

• Home state – the state where the insured

January - March

June 1

following order: City, Country, Province/Region,

maintains its principal place of business, or if

April - June

September 1

and Postal Code. Follow the country’s practice for

individual, the individual’s principal residence;

July - September

December 1

entering the postal code. Do not abbreviate the

if 100% of the insured risk is located in a

October-December

March 1

country’s name.

state outside the insured’s principal place

Mail Form 570-A and payment to:

of business or principal residence, then it is

Electronic Funds Transfer (EFT) – To submit

where the greatest percent of the insured’s

your nonadmitted insurance tax payment using

FRANCHISE TAX BOARD

taxable premium for that insurance contract is

Electronic Funds Transfer (EFT), please use the

PO BOX 942867

allocated.

following tax type code, EFT code 02020. You

SACRAMENTO CA 94267-065

• Principal place of business – the state

must use the correct EFT code to ensure proper

where the insured maintains its headquarters

E Amended Returns

credit to your FTB account.

and where the insured’s high-level officers

Use Form 570 to file an amended return. File an

direct, control, and coordinate the business

A Purpose

amended return to correct an error on the original

activities; or if the insured’s high-level officers

Use Form 570-A, Nonadmitted Insurance Tax

return or to claim a refund.

direct, control, and coordinate the business

Return, to determine the tax on premiums paid or

activities in more than one state, the state in

Check the “Amended” box at the top of the form.

to be paid to nonadmitted insurers on contracts

which the greatest percentage of the insured’s

Attach a copy of the original return behind the

covering risks. Also, use Form 570-A to file

taxable premium for that insurance contract

amended return and write “copy” in red across

an amended return. See Section E, Amended

is allocated; or if the insured maintains its

the face of the original return. When completing

Returns, for more information.

headquarters or the insured’s high-level

line 1 through line 15 of the amended return, use

officers direct, control, and coordinate the

the amounts that should have been reported on

B Who Must Pay Nonadmitted

business activities outside the U.S., the

the original return.

state to which the greatest percentage of the

Insurance Tax

Amended returns must be filed within four years

insured’s taxable premium for that insurance

of the original due date or within one year from

The tax is imposed on a home state insured who

contract is allocated.

the date of the overpayment, whichever period

independently purchases or renews an insurance

• Principal residence – the state where the

expires later.

contract during the calendar quarter from an

insured resides for the greatest number of

Attach copies of all contracts for changes to

insurer, including wholly-owned subsidiaries,

days during a calendar year; or if the insured’s

correct an error on the original return or to claim

not authorized to transact insurance business in

principal residence is located outside the U.S.,

California.

a refund.

the state to which the greatest percentage

of the insured’s taxable premium for that

Do not file an amended return to claim returned

If you do not know if the insurer is authorized

insurance contract is allocated.

premiums. See the Specific Line Instructions for

to conduct business in California, call the FTB

• Home state insured – or “home state insured

Nonadmitted Insurance Desk at 916.845.4098.

line 5.

applicant” – a person whose home state is

The tax will not be imposed on any of the following:

F Third Party Designee

California and who has received a certificate

• Insurance coverage for which a tax on the

or evidence of coverage as set forth in Section

If the entity wants to allow the FTB to discuss its

gross premium is due or has been paid by

1764 of the Insurance Code or a policy as

surplus line brokers pursuant to Insurance

2012 return with the paid preparer who signed

issued by an eligible surplus line insurer, or a

it, check the “Yes” box in the signature area of

Code Section 1775.5 (surplus lines tax).

person who is an applicant.

the return. This authorization applies only to the

Form 570 Instructions 2011 Page

California Form 570 Draft - Nonadmitted Insurance Tax Return - 2012 Page 4

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