Senate adopts two-year moratorium on premium-receipts tax collections for captive insurers; SB 890 set for third reading

The Maryland Senate on Thursday adopted a floor amendment to Senate Bill 890 that places a two-year moratorium on the collection of certain premium-receipts tax liabilities tied to captive insurers used by nonprofit hospitals and orders the Maryland Insurance Administration (MIA) to report back after the moratorium period.

Senators debated the amendment on the Senate floor after the clerk read the bill. The bill’s floor explanation said captive insurers are a form of self-insurance hospitals sometimes use to manage malpractice and other risks, and that past ambiguity left hospitals uncertain about potential premium-receipts tax liabilities. "We landed on doing a moratorium…for 2 years on any collection of any liabilities that may be owed on this premium receipts tax, and then after 2 years, have MIA do a report back on where the existing investigations are," the senator explaining the amendment said.

Opponents said the amendment’s drafting could be read to require the State to reimburse past taxpayers beyond nonprofit hospitals. "What this means is that the State of Maryland will have to refund money not just to the hospitals, but to anyone else who has paid the premium receipts tax, and it could be a multimillion dollar refunds," the senator from the 42nd District said, urging more time to review the language.

Senators discussed procedural options to allow additional review. The body voted on a motion to special order consideration to a later time to permit further review and negotiation, and then approved the amendment. Following adoption, the presiding officer ordered Senate Bill 890 printed for third reading.

The amendment, as adopted, pauses collection of the specified liabilities for two years and tasks the Maryland Insurance Administration with reporting back on ongoing investigations and the scope of potential liabilities at the end of that period. The transcript indicates a fiscal note accompanies the bill but that investigators and MIA do not yet have a full picture of which entities or what total liabilities may be implicated.

Next steps: with the amendment adopted and the bill ordered printed, SB 890 was placed on the calendar for third reading and further floor consideration at the special-ordered time the Senate set.

Sources: Floor debate and procedural actions on the Senate floor, March 26, 2026.