From: Business Insurance
The New Jersey Supreme Court on Monday upheld an appeals court ruling that Johnson & Johnson is due a $56 million premium tax refund related to its captive insurance company.
The ruling in Johnson & Johnson v. Director, Division of Taxation hinged on changes New Jersey made to its insurance law after the passage of the federal Nonadmitted and Reinsurance Reform Act of 2011.
New Brunswick, New Jersey-based Johnson & Johnson covers risks located nationwide through its Vermont-domiciled captive Middlesex Assurance, court papers say.
Prior to the passage of the NRRA, states could assess premium taxes paid to nonadmitted insurers only for premiums that covered risks within the state. The NRRA, however, allowed a home state to tax all of an insured entity’s nonadmitted premium, even if some of the risks were based in other states.