Washington’s insurance commissioner issued a cease and desist order against Microsoft Corp. to stop using its Arizona-domiciled captive, Cypress Insurance Co.
Insurance Commissioner Mike Kreidler’s cease and desist order is for without holding a certificate of authority, placing unauthorized insurance with a Washington domiciled insured without holding a Washington State surplus line broker license, and failing to timely remit a 2 percent premium tax to the state of Washington on premiums earned.
The order, issued on May 9, states that Microsoft and its officers, directors, trustees, employees, agents, and affiliates to immediately cease and desist from:
- Engaging in or transacting the unauthorized business of insurance in the state of Washington;
- Seeking, pursuing and obtaining any insurance business in the state of Washington;
- Soliciting Washington residents to purchase any insurance lo be issued by an unauthorized insurer;
- Soliciting Washington residents to induce them to purchase any insurance contract.
Cypress is an Arizona domiciled captive insurance company that was admitted as a captive insurance company on July 1, 2008, according to the commissioner’s order.
Cypress has collected approximately $71.1 million in premium from Microsoft between 2013 and 2018, according to the order.
But the captive apparently didn’t pay premium taxes for that period.
“Cypress has not paid premium lax to the state of Washington for the years 2013, 2014, 2015, 2016, 2017, and 2018, while insuring Microsoft Corporation, representing approximately S1,423,898.70 in unpaid premium tax,” the order states.
Microsoft has 90 days from receipt of the order to demand a hearing.
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