Johnson & Johnson v. Dir., Div. of Tax’n

The New Jersey Supreme Court wisely declined the opportunity to jump into the wormhole of self-procured insurance issued by unauthorized, out-of-state insurers. Instead, in Johnson & Johnson v. Dir., Div. of Tax’n, the Court issued a per curium opinion affirming the Appellate Division’s ruling. The Appellate Division held that 2011 amendments to N.J.S.A. 17:22-6.64 did not impose a duty on an insured to pay an insurance premium tax because it received insurance from its own out-of-state entity. That entity, typically called a “single-parent” or “pure” captive insurance company, is separate and distinct from surplus insurers and surplus agents. Had that entity been involved in the surplus insurance market, the result would likely have been different.

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