Insurance Company Taxes and Levies
Insurance Company Premium Tax and Automobile Levy
Insurers (except fraternals) are required to pay premium tax on premiums receivable for business transacted in the province. The premium tax rates are 3.75 per cent on life and accident and sickness premiums, and 4.00 per cent for all other classes of insurance (“general”) premiums.
An Automobile Levy is payable by each insurer underwriting automobile insurance in the province based on their “number of earned vehicles”. The purpose of the levy is to allow the province to recover the health care costs associated with innocent victims of automobile accidents in an efficient manner. In return for payment of the levy an insurer is exempt from being subrogated against by the province for certain health care costs.
Quarterly Instalments and Annual Settlement
Instalments are due on the last day of each quarter of the year. Insurers are required to remit one quarter of the amount of premium tax and automobile levy it estimates will be payable by them for that year. Quarterly instalment returns are available here:
An Annual Return for premium tax for the preceding year, must be filed by March 31st annually. This return details any further amount owed to the province or refund due to the insurer for the preceding year. Amounts owed are also due by March 31st. Refunds are sent out to insurers in late April. An Annual Return is available here:
An Annual Automobile Levy Statement detailing the amount due to the province or refundable for the preceding year is mailed to insurers in late January. Amounts owed are due by March 31st. Refunds are sent out to insurers in late April.
Failure to remit on an acceptable basis may result in the province levying an interest charge of six per cent per annum.