The American Insurance Association (AIA) led a delegation of property-casualty trade associations on Monday in urging New Mexico’s Blue Ribbon Tax Reform Commission to recommend real improvements to the state’s insurance tax system. Reportedly, insurance companies doing business in New Mexico currently pay more than their fair share into state tax coffers.
New Mexico reportedly imposes one of the highest premium tax burdens in the nation on property-casualty insurance, increasing costs for both individual New Mexicans and businesses operating in the state. Among the essential insurance coverages that are reportedly negatively impacted by the excessive taxation: workers’ compensation, automobile property and liability coverages, and protection against catastrophic losses.
“Recommendations coming from the Blue Ribbon Commission will carry significant weight with the governor and state legislature,” noted Fred Bosse, AIA Southwest Region vice president. “The members of the Commission should recognize that, in every state, property-casualty insurers make huge, positive contributions to state economies through creation of good, high-paying jobs – in a clean, non-polluting industry – and significant infrastructure investment. Unfortunately, because of the effects of the nationwide system of retaliatory taxation unique to the insurance industry, New Mexico’s current premium tax burden (higher than all but three other states) stands as a formidable barrier to attracting insurance industry jobs and investment to this state.”
The industry trade groups testified that the Commission now has the opportunity to follow other states that have reduced premium tax rates and added appropriate tax credits – even in today’s stressed budgetary environment – in order to provide these economic incentives. Bosse stated that “the trend toward insurer tax equity is clear. Many states are embracing pro-competitive insurance tax policies in order to attract insurance industry investments and jobs, as well as to reduce insurance costs for both commercial and personal insurance policyholders.”
On the other hand, the industry testimony noted that any suggestion by the Commission to increase New Mexico’s tax burden on insurance would only worsen the retaliatory tax impact [on New Mexico companies] and distinguish New Mexico as the state that burdens property-casualty insurance with the highest taxes in the nation.
Topics Carriers Property Market Property Casualty Mexico New Mexico
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