38.2-411 - Failure to pay estimated assessment.
§ 38.2-411. Failure to pay estimated assessment.
A. In case of any underpayment of estimated assessment by a company, exceptas provided in subsection D of this section, interest shall be added to theassessment for the license year and shall be determined at the rate set forthin § 58.1-15. Interest shall be based on the amount of the underpayment asdetermined in subsection B for the period of the underpayment as determinedin subsection C.
B. For purposes of subsection A of this section the amount of theunderpayment shall be the excess of the amount of the installment which wouldbe required to be paid if the estimated assessment were equal to ninetypercent of the assessment for the license year, over any amount of theinstallment paid on or before the last date prescribed for payment.
C. The period of the underpayment shall run from the date the installment wasrequired to be paid to whichever of the following dates is the earlier:
1. The first day of the third month following the close of the assessableyear.
2. For any portion of the underpayment, the date on which the portion ispaid. For purposes of this subdivision, a payment of estimated assessment onany installment date shall be considered a payment of any previousunderpayment only to the extent the payment exceeds the amount of theinstallment determined under subsection B for that installment date.
D. Notwithstanding the provisions of subsections A, B and C of this section,the addition to the assessment for any underpayment of an installment shallnot be charged if the total amount of all estimated assessment payments madeprior to the last date prescribed for the payment meets the followingconditions. The total shall equal or exceed the amount which would have beenrequired to be paid on or before the last date prescribed for the payment ifthe estimated assessment were the lesser of:
1. The assessment for the preceding license year which was computed on thebasis of an assessable year of twelve months; or
2. An amount equal to the assessment computed at the rate applicable to thelicense year based on the facts shown on the company's report, and theapplicable law for the preceding license year; or
3. a. An amount equal to ninety percent of the assessment measured by directgross premium income received or derived in the assessable year computed byplacing on an annualized basis the assessable direct gross premium income:
(1) For the first three months of the assessable year, in the case of theinstallment required to be paid in the fourth month;
(2) For the first three months or for the first five months of the assessableyear, in the case of the installment required to be paid in the sixth month;
(3) For the first six months or for the first eight months of the assessableyear, in the case of the installment required to be paid in the ninth month;and
(4) For the first nine months or for the first eleven months of theassessable year, in the case of the installment required to be paid in thetwelfth month of the assessable year.
b. For the purposes of this subsection, the assessable direct gross premiumincome shall be placed on an annualized basis by (i) multiplying by twelvethe assessable direct gross premium income referred to in subdivision 3 a ofthis subsection, and (ii) dividing the resulting amount by the number ofmonths in the assessable year referred to in subdivision 3 a of thissubsection.
E. The Commission shall determine the application of this section toassessable years of less than twelve months.
(1977, c. 317, § 38.1-48.6; 1986, c. 562.)