Concerns about California premium taxes prompted Pacific Life Insurance Company to redomesticate its operations to Nebraska from California effective Sept. 1, 2005.
Nebraska Insurance Director L. Tim Wagner approved the move Aug. 19.
The premium tax rate is 1% in Nebraska. That compares with a rate of 2.35% in California, says Tennyson Oyler, a Pacific Life spokesman.
When Pacific Life was domesticated in California, it had to pay the higher of each state’s local tax rate or California’s 2.35% rate in each of the 50 jurisdictions in which it was authorized to conduct business, Oyler says.
The requirement that an insurer pay the higher tax is called a “retaliatory tax.”
Now, Pacific Life will pay a maximum rate of 1%, Oyler says.