The Illinois Senate is deliberating legislation which will repeal a premium tax imposed on industrial insurer captive insurers.
Senate Bill S (SB) 1573 initially sought to repeal parts of SB 3324, a self-procurement tax on insurance premiums paid to unauthorised insurers. The tax is equal to the tax on surplus lines brokers.
However, an amendment has narrowed the scope of the bill to a tax exemption for industrial insured’s captives.
Matthew Boch, a partner at law firm McDermott Will & Emery, said: “It would be incredibly beneficial to see this legislation enacted. It would improve the business climate in Illinois and help attract and retain corporate headquarters in the State. Unfortunately, at the current time, it’s a difficult environment for legislative action with a new governor and a lot of fiscal stress.”
Mary Kay Martire, also a partner at McDermott Will & Emery, added: “It’s encouraging that the bill will be seen by the insurance committee. If the bill passes out of committee, it’s a positive sign. However, the State has a history of passing legislation at the last minute, so we will likely need to wait until the end of the legislative session in late May or early June to see if the legislation is enacted.”
The Illinois Senate, North America, Matthew Boch, McDermott Will & Emery, Mary Kay Martire, Insurance