Under Circular Letter 2020-89 (Guidelines in the Treatment of Creditable Withholding Taxes), September 3, 2020, CWT may be considered as admitted assets of insurance companies, subject to conditions and documentation provided therein. Prior to this circular, CWTs were considered as non-admitted assets. It has been observed that several companies have recorded in their books unutilized or excess CWT that have been considered as non-admitted assets. Under Statutory Issue Paper 83 of the US National Association of Insurance Commissioners (NAIC), current income tax recoverables (i.e., CWTs) are considered as admitted assets if they are reasonably expected to be recovered. For insurance companies, this circular finds relevance with collected direct premiums, subject to CWT of 2 percent; collected reinsurance commission income from ceded premiums, subject to CWT of 2 percent; and collected rental income from properties or equipment of insurance companies, subject to CWT of 5 percent.
