(a) An in-state insurance company that has an insurance company affiliate may enter into reinsurance agreements with the affiliate, pursuant to which the tax imposed on gross premiums under § 56-4-205 is allocated from the ceding company to the reinsuring company. The reinsurance agreements shall be effective to enable the reinsuring company to use the premium tax liability so allocated as a credit under § 56-4-217; provided, that the ceding company may not use as a credit under § 56-4-217 any tax liability allocated by the ceding company to the reinsuring company. No allocation of premium tax liability as described in this section shall relieve the ceding company from responsibility for payment of the full premium tax on insurance business written in this state and for the filing of sworn returns in accordance with this section. Nothing in this section shall result in a reduction of the premium tax and franchise and excise tax liability of the ceding company from that which would have been imposed in the absence of this section.

(b) As used in this section:

(1) “In-state insurance company” means an insurance company:

(A) Having its principal place of business in this state; and

(B) That does not transact insurance business in any other state; and

(2) “Insurance company affiliate” means a corporation:

(A) Authorized to conduct insurance business in this state after March 19, 1991;

(B) That does not transact insurance business in any other state; and

(C) Fifty percent (50%) or more of the voting stock of which is directly or indirectly controlled by, or under common control with, an in-state insurance company.