USAA Refutes Texas Comptroller's Claims; Asks State to Adhere to Texas Law

    SAN ANTONIO--Jan. 7, 2002--USAA, the fourth largest insurer in Texas, today has responded to State Comptroller Carole Keeton Rylander's press release on a lawsuit USAA filed last year to obtain a refund on state taxes the Texas-based company overpaid.
    "Ms. Rylander's allegations are inflammatory and totally inaccurate," said Brad Rich, USAA's general counsel. "USAA is one of Texas' most responsible corporate citizens. We take seriously our responsibility to the State of Texas to pay those taxes we are required to pay -- and, in fact, we have paid more than our share according to Texas law. As stewards of our members' assets, we also have a responsibility to our members to pay no more and no less tax than the state requires."
    The dispute is over taxes owed to the state by insurance companies under Texas Insurance Code law. The law stated that insurance companies operating in Texas were required to pay premium taxes -- substantial taxes unique to insurance companies -- in lieu of other state taxes. Many other states have similar laws.
    "The law is extremely clear," said Rich. "Almost two years ago, USAA filed a claim to recover a refund of certain state taxes owed to us, and we have been working with the state ever since to resolve this matter," said Rich.
    "Ms. Rylander has since worked to change this law, which the legislature did prospectively during this past session. As the Comptroller is only too well aware, her efforts to change the statute retroactively were rejected by the Legislature. We are simply asking the state to adhere to its own law, as it existed for decades and as it was written when we filed our refund claim."
    Since 1991, USAA has paid nearly $495 million in state tax, including those that support Texas schools. But the state collected more tax from USAA than the company was legally required to pay. It is this excess tax that USAA is seeking to recover.
    "We have a high degree of confidence in the strength of our case and expect the court will agree," Rich said.
    USAA has been serving military families since 1922 and has become one of America's leading financial services companies. The association, well known for its exceptional service, was named the number one financial services company in America last year through a survey sponsored by the "American Banker" publication. USAA is one of only four insurance companies nationwide to receive the highest ratings from independent financial ratings agencies. It offers its 4.7 million members a comprehensive range of insurance, banking and investment products and services designed to help them meet their financial needs. The company is headquartered in San Antonio, Texas, and has offices throughout the United States and Europe.