Pacific Mut. Life Ins. Co. v. Hobbs
| Decision Date | 06 July 1940 |
| Docket Number | 34696. |
| Citation | 152 Kan. 230,103 P.2d 854 |
| Parties | PACIFIC MUT. LIFE INS. CO. v. HOBBS, Com'r of Insurance of Kansas, et al. |
| Court | Kansas Supreme Court |
Syllabus by the Court.
The statute requiring foreign insurance companies, at the time of making annual statements required by law, to pay taxes on the gross amount of premiums received by them for business done in the state during the preceding year, imposes taxes payable at the end of the year, for the privilege of doing business in the state. Gen.St.1935, 40-252.
The Legislature has the power to levy and collect an excise or license tax on any business or occupation.
The tax on gross premiums received by foreign insurance companies for business done in the state is an "excise tax" in the nature of a franchise or privilege tax on the privilege of doing business, and partakes of the nature of a license tax in the sense that payment thereof is required as a condition precedent to the renewal of certificates of authority of such companies. Gen.St.1935, 40-252.
1. Our statute G.S.1935, 40-252, requiring foreign insurance companies, at the time of making annual statements required by law, to pay taxes on the gross amount of premiums received by them for business done in the state during the preceding year, imposes such taxes, payable at the end of the year, for the privilege of doing business in the state.
2. The tax on gross premiums received by foreign insurance companies for business done in the state is an excise tax in the nature of a franchise or privilege tax on the privilege of doing business, and partakes of a license tax in the sense that payment thereof is required as a condition precedent to the renewal of such companies' certificates of authority.
Original mandamus proceeding by the Pacific Mutual Life Insurance Company against Charles F. Hobbs, Commissioner of Insurance of the state of Kansas, and Walter E. Wilson, Treasurer of the state of Kansas, to compel the defendants to refund to plaintiff certain moneys which it was alleged were unlawfully assessed and paid under protest.
Motion to quash the writ sustained.
Jay S Parker, Atty. Gen., C. Glenn Morris, Asst. Atty. Gen., and Joseph Scott Payne, Sp. Asst. to Atty. Gen., for defendants.
Robert Stone, James A. McClure, Robert L. Webb, Beryl R. Johnson and Ralph W. Oman, all of Topeka, for plaintiff.
This is an original proceeding in mandamus to compel the defendants as state officials to refund to plaintiff certain moneys which it is alleged was unlawfully assessed and paid under protest to the defendant insurance commissioner and now held as a trust fund by the defendant state treasurer.
For a number of years prior to 1936 the Pacific Mutual Life Insurance Company of California (hereinafter referred to as the old company) was authorized to and did business in Kansas as a foreign life insurance company. On July 22, 1936, in a court of competent jurisdiction in California, the old company was found to be insolvent and ceased doing business. On the same date the insurance commissioner of California was appointed conservator of the company and a decree was entered authorizing the reinsurance and assumption of all policies and policy obligations of the old company in a newly organized company called the Pacific Mutual Life Insurance (hereinafter referred to as the new company). Substantially all of the assets of the old company were transferred to the new company, plaintiff herein, and, with certain exceptions all of the policy contracts of the old company were reinsured and assumed by the plaintiff company as of July 22, 1936. The plaintiff assumed and agreed to pay all taxes due from the old company to any state where the old company had transacted business.
The old company, between January 1 and May 1, 1936, paid a tax to the state of Kansas on premiums received in Kansas during the year 1935, and thereupon was duly authorized by a renewal certificate of authority from the commissioner of insurance of the state of Kansas to do business in Kansas for the year 1936, ending May 1, 1937. On August 6, 1936, the new company was granted a certificate of authority from the state of Kansas to do the identical business in Kansas the old company had been doing, which certificate of authority authorized the new company to do business in Kansas beginning July 22, 1936, until May 1, 1937.
In 1937 the new company filed its annual statement as of December 31, 1936, and made application for renewal of its certificate of authority to do business in the state of Kansas from May 1, 1937, until May 1, 1938. The new company tendered a tax on premiums collected by it in Kansas from July 22, 1936, to December 31, 1936, but declined to tender a tax on premiums collected from January 1, 1936, to July 22, 1936, by the old company.
Before the defendant insurance commissioner would issue a renewal certificate of authority to the new company to do business from May 1, 1937, to May 1, 1938, he required the new company to pay a tax, including a tax upon the premiums collected by the old company from January 1, 1936, to July 22, 1936. The tax upon these premiums collected by the old company between January 1, 1936, and July 22, 1936, paid under protest, is the sum which plaintiff company now contends should be returned.
Our statute G.S.1935, 40-252, provides that every insurance company doing business in this state shall pay to the commissioner of insurance "fees and taxes specified in the following schedules." Schedule B applies to insurance companies organized under the laws of another state. It sets forth a list of admission and of annual fees, and then provides: "As a condition precedent to the issuance of the annual certificate of authority, provided in this code, every company organized under the laws of any other state of the United States or of any foreign country shall pay a tax upon all premiums received during the preceding year at the rate of two percentum per annum: Provided, however, In the computation of the gross premiums all such companies shall be entitled to deduct therefrom any premiums returned on account of cancellation and all premiums received for reinsurance from any other company authorized to do business in this state."
The final paragraph of the section reads:
Section 40-225, referred to in the foregoing paragraph, provides: "Every insurance company or fraternal benefit society doing business in this state shall annually, on the first day of January or within sixty days thereafter, file with the commissioner of insurance a statement of its condition as of the preceding thirty-first day of December. ***"
The language of the statute is plain and there is little room for construction. Every company organized under the laws of any other state "shall pay a tax upon all premiums received during the preceding year at the rate of two percentum per annum." At the time the annual statement is filed, the company is required to make a return stating the amount of premiums received during the year ending on the 31st day of December next preceding. Thereupon the commissioner of insurance shall assess the taxes upon the company "on the basis and at the rate provided herein and such taxes shall thereupon become due and payable." The tax must be paid as a condition precedent to the issuance of the annual certificate of authority provided in the code.
The legislature has power to levy and collect an excise or license tax on any business or occupation. City of Newton v. Atchison, 31 Kan. 151, 1 P. 288, 47 Am.Rep. 486.
The tax imposed by the statute on foreign insurance companies is an excise tax in the nature of franchise or privilege tax. It is a tax on the privilege of doing business in the state. It has been so held in this state (McNall v. Insurance Co., 65 Kan. 694, 70 P. 604), and such is the concurrent voice of the authorities in other jurisdictions. State v. National Life Ins. Co., 223 Iowa 1301, 275 N.W. 26; State ex rel. Smrha v. General American Life Ins. Co., 132 Neb. 520, 272 N.W. 555; Carpenter v. Peoples Mut. Life Ins. Co. (Cal.App.) 65 P.2d 827.
The plaintiff company admits the tax provided for in the statute is an excise...
To continue reading
Request your trial
-
Great Northern Life Ins. Co. v. Read
...35 S.Ct. 309, 59 L.Ed. 673; Morrissey v. Commissioner, 296 U.S. 344, 355, 56 S.Ct. 289, 80 L.Ed. 263. 9 Pacific Mut. Life Ins. Co. v. Hobbs, 152 Kan. 230, 103 P.2d 854, 856, 857; Sovereign Camp, W. O. W., v. Casados, D.C.N.M., 21 F.Supp. 10 Philadelphia Fire Ass'n v. People of State of New ......
-
In re Insurance Tax Cases
... ... 300 In re INSURANCE TAX CASES. AETNA INS. CO. v. HOBBS, Com'r of Insurance, and fifteen other ... plaintiffs Central Life Assur. Soc. (Mutual), Trinity ... Universal Ins. Co., ... Co., Standard ... Accident Ins. Co., Pacific Mutual Life Ins. Co., Columbian ... National Life Ins ... ...
-
Lincoln Nat. Life Ins. Co. v. Read
... ... Slater Mills, Inc., v. Gilpatric, ... State Treasurer, 97 Conn. 521, 117 A. 806; Pacific ... Mut. Life Ins. Co. v. Hobbs, Commissioner of Insurance, ... 152 Kan. 230, 103 P.2d 854 ... ...
-
Lincoln Nat. Life Ins. Co. v. Read, Case Number: 31338
...P.2d 508; William A. Slater Mills, Inc., v. Gilpatric, State Treasurer, 97 Conn. 521, 117 A. 806; Pacific Mut. Life Ins. Co. v. Hobbs, Commissioner of Insurance, 152 Kan. 230, 103 P.2d 854. ¶23 In the latter case it was held:'1. The statute requiring foreign insurance companies, at the time......