The Texas Comptroller of Public Accounts offers a temporary amnesty to unlicensed captive insurance companies, and to their insureds, seeking to comply voluntarily with state insurance premium tax laws. Nonadmitted captives, meaning captive insurance companies not licensed under Chapter 964 of the Insurance Code, are subject to the unauthorized insurance premium tax under Chapter 226, Subchapter A. The tax runs at 4.85 per cent of gross premiums charged for insurance covering people, property or activities located in Texas. Where the captive does not pay the tax when due, the insured becomes jointly responsible. Under Rule 3.835 of the Texas Administrative Code, the liability falls jointly and severally on the insurer, the insurer's agent and the insured, and the tax is due no later than 1 March following the calendar year in which the insurance was effectuated, continued or renewed. The lookback period for the amnesty is four years, and penalties and interest are waived for those who take part. Captives and insureds seeking the amnesty must file Forms 25-108 and 25-123, the Texas Annual Unauthorized Insurance Tax Report and its supplement, for insurance tax years 2022, 2023, 2024 and 2025, covering insurance written from 1 January 2022 to 31 December 2025. The forms must be filed by 31 December 2026 to qualify. The Comptroller's office will notify certain franchise taxpayers that may be affiliated with a nonadmitted captive. Receiving a notice is not a condition of eligibility, and taxpayers who receive one but are not affiliated with a nonadmitted captive need take no further action. Nonadmitted captives writing only the risks of a parent or affiliated companies are exempt from regulation by the Texas Department of Insurance under section 101.053(b)(6) of the Insurance Code, but that exemption does not extend to the premium tax. Captives authorised under Chapter 964, which pay premium tax under Chapter 223A and maintenance taxes under section 964.068, fall outside the unauthorised insurance premium tax altogether.
