2 [G. L. c. 63, §§ 16-18 Before the enactment of any statute specifically covering the subject, it was held that, inasmuch as the tax on savings banks was an excise on the privilege of doing business, when a savings bank had been perpetually enjoined from doing business,1 or when the bank commissioner had taken and retained possession of its property and business, it was not liable to the tax, but when the bank was still in the exercise of its corporate powers, although they had been somewhat curtailed by the courts on account of its weak financial position, it was still subject to the excise tax. The effect of the foregoing statute is, in the class of cases in which the bank would not have been taxable at all under the law as it previously stood, to make the bank liable to a portion of the tax proportionate to the number of days in which it had been doing business in the taxable period. 3 Massachusetts Hospital Life Insurance Co. SECTION 17. The Massachusetts Hospital Life Insurance Company shall semi-anually, on or before May tenth and November tenth, make a return, signed and sworn to by a majority of its board of directors, of the full amount of all money and property, in detail, in its possession or charge as deposits, trust funds or for purposes of investment, and shall pay upon all the same, except upon deposits invested in loans secured by mortgages of real estate taxable in this commonwealth and in bonds or certificates of indebtednes of the United States, a tax at the rate imposed upon savings banks on account of deposits. If said corporation neglects to make such return, it shall forfeit fifty dollars for each day such neglect continues; and if it wilfully makes a false statement in any such return, it shall be punished by a fine of not less than five hundred nor more than five thousand dollars. Savings Bank Insurance SECTION 18. Savings and insurance banks doing business under chapter one hundred and seventy-eight shall, in respect to all funds held by the insurance department as a part of its insurance reserve or surplus, and the General Insurance Guaranty Fund created by said 'Commonwealth v. Lancaster Savings Bank, 123 Mass. 493 (1878). 'Greenfield Savings Bank v. Commonwealth, 211 Mass. 207 (1912). : - Commonwealth v. Barnstable Savings Bank, 126 Mass. 526 (1879). G. L. c. 63, §§ 18-20] chapter shall in respect to all funds held by it, pay to the commonwealth the same taxes, at the same rate, to the same extent, and in the same manner as taxes under section eleven are payable on deposits held by the savings department. Savings and insurance banks shall not be taxable on funds held as part of the expense guaranty fund, or of the insurance guaranty fund, nor shall such banks or the General Insurance Guaranty Fund be liable to the commonwealth for any taxes or fees provided to be assessed upon life insurance companies, or for any taxes or fees except as above provided. All insurance policies and annuity contracts issued by such banks shall otherwise be exempt from taxation. Co-operative Banks SECTION 19. The capital stock, corporate franchises and personal property, but not the real estate, of co-operative banks shall be exempt from taxation. This exemption is doubtless granted to avoid double taxation, as the capital of co-operative banks is almost entirely invested in mortgages of real estate. The exemption of co-operative banks is also found in chapter fifty-nine.1 INSURANCE COMPANIES Life Insurance Companies SECTION 20. Every life insurance company, as defined by section one hundred and eighteen of chapter one hundred and seventy-five, authorized to transact business in the commonwealth shall annually pay an excise of one-quarter of one per cent upon the net value of all policies in force on December thirty-first of the year preceding that in which the tax is payable, issued or assumed by such company on the lives of residents of this commonwealth as determined by the commissioner from the return required under this section and such other evidence as he may obtain. All contingencies of any other character insured against by such company under authority of clause sixth of section forty-seven of chapter one hundred and seventy-five or any other provision of law, contracts for which are required to be in separate and distinct policies, shall be taxable under sections twentytwo and twenty-three of this chapter. Every such company shall annually, on or before May first, make a return to the commissioner, 1 G. L. c. 59, §5, cl. 16, 30, supra, pages 208, 214. [G. L. c. 63, § 20 on oath of its president or secretary and its actuary, giving in such detail as the commissioner shall require the total number of policies in force on December thirty-first preceding on the lives of residents of this commonwealth, the aggregate net value thereof and the aggregate amount insured. Whenever the commissioner deems it for the best interest of the commonwealth he may require in addition to the above information the following details relating to each policy of ordinary business in force on December thirty-first preceding on the life of a resident of Massachusetts: the number, date and class, the age of the assured, the amount insured and the net value. In respect to ordinary business the aggregate net value so reported shall be the combined aggregate of the mean reserve computed for each policy, or each group of policies requiring a separate computation to determine their net value, on the basis of valuation used or approved by the commissioner of insurance under section nine of chapter one hundred and seventy-five. In respect to industrial business the aggregate net value so reported may be estimated upon the basis of such general averages or otherwise as shall be authorized by the commissioner with the approval of the commissioner of insurance. A life insurance company within the meaning of the foregoing statute is a company engaged in the business of issuing any form of policy conditioned upon the continuance or cessation of human life,' and the business of life insurance thus includes the writing of term insurance, endowment insurance and annuity contracts, as well as ordinary policies of life insurance, properly so-called. In case a life insurance company issues insurance against accident, liability or sickness, it is taxable with respect to such policies under sections twenty-two and twentythree; but an insurance company is allowed to include in a life insurance policy a provision that premiums shall be waived in case of total disability and that a greater amount shall be paid if the insured meets death by accident than if he dies a natural death, and such policies are taxable under this section without apportionment.* 1See G. L. c. 175, §118. 'Mutual Benefit Life Insurance Co. v. Commonwealth, 227 Mass. 63 (1917). It was also held in the same case that there was nothing unconstitutional in taxing the company on annuity contracts, although the annuitant was also taxed on the annual payments as income. 'G. L. c. 175, §24. See. Metropolitan Life Insurance Company v. Insurance Commissioner, 208 G. L. c. 63, §§ 20, 21] By the General Statutes, life insurance companies were obliged to pay to the commonwealth "one cent on every thousand dollars insured by them on lives." In 1880 a tax of one-half of one per cent upon the aggregate net value of policies in force held by residents of the commonwealth was imposed, and in 1881 this tax was reduced to one-quarter of one per cent and there it has remained. The statute imposing this tax has been held to be constitutional as an excise upon the privilege of holding and managing the property of others, and it was further held that the method adopted to ascertain the value of this privilege was not unreasonable. In 1915 the statute was recast so as to authorize the commissioner to require the return of additional details and it was again amended in 1919 to make it clear that accident, liability and health insurance, issued under policies distinct from those on life, were not taxable under this section.' Retaliatory Tax on Foreign Life Insurance Companies SECTION 21. Every foreign life insurance company shall annually pay with respect to business taxable under the preceding section, in addition to the excise hereby imposed, a sum equal to the excess over such excise of the amount of tax which would be imposed in the same year by the laws of the state or country under which such company is organized, upon a life insurance company incorporated in this commonwealth, or upon its agents, if doing business to the same extent in such state or country. The first provision on this subject was made in 1856, the statute then enacted requiring "the same taxes, fines, penalties, deposits and obligations" on companies incorporated in another state and doing business in Massachusetts as were imposed on Massachusetts companies doing business in such other state. In 1873 provision was made for the taxation of every foreign life insurance company on premiums charged or received on contracts made in this commonwealth during the year at the highest rate imposed by the state of incorporation of such company Mass. 386 (1911); Metropolitan Life Insurance Company v. Insurance Commissioner, 220 Mass. 52 (1914). Connecticut Mutual Life Insurance Co. v. Commonwealth, 133 Mass. 161 (1882). St. 1915, c. 217. 'St. 1919, c. 349, §7. [G. L. c. 63, §§ 21-23 upon companies chartered by this commonwealth. This statute was in force before the excise on net values now imposed by section twenty was enacted, and it was not intended that a foreign company should pay both taxes, and the tax on premium receipts was in no case assessed unless it exceeded the tax on net values.1 The object of the statute was to make the rate of taxation thereunder no more burdensome upon foreign companies doing business here than the like rate upon Massachusetts companies doing business in the foreign state. In 1919 the statute was enacted in its present form, making it clear that the tax was not additional to the tax on net values except so far as it exceeded such tax, and also extending its provisions so as to apply to all taxes assessed on Massachusetts life insurance companies by other states, whether based on premium receipts or otherwise. Insurance Companies Doing Business Other Than Life Insurance SECTION 22. Every domestic insurance company as defined in section one of chapter one hundred and seventy-five, except life insurance companies with respect to business taxable under section twenty, shall annually pay an excise of one per cent upon the gross premiums for all policies written or renewed, all additional premiums charged, and all assessments made by such company on policy holders during the preceding calendar year; but such premiums for policies written or renewed for insurance of property or interests in other states or countries where a tax is actually paid by such company, or its agents, shall not be so taxed. SECTION 23. Every foreign insurance company as defined in section one of chapter one hundred and seventy-five, except life insurance companies with respect to business taxable under sections twenty and twenty-one, shall annually pay an excise upon the gross premiums for all policies written or renewed, all additional premiums charged, and all assessments made during the preceding calendar year for insurance of property or interests in this commonwealth, or which are subjects of insurance by contracts issued through companies or agents therein, at the rate of two per cent but not less in amount than 1 Metropolitan Life Insurance Co. v. Commonwealth, 198 Mass. 466 (1908). * Metropolitan Life Insurance Co. v. Commonwealth, 198 Mass. 466 (1908). |