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New Hampsihre may be the first Eastern state to lower its tax on insurance companies as states continue to compete to attract more business.
The issue is currently the subject of an economic impact study by Ernst & Young.
The state’s domestic insurers are behind the tax cut idea, noted the lobbyist for the New Hampshire Domestic Insurers Association, George Roussos, who is with the firm, Orr and Reno.
“This is potentially a huge thing,” said Roussos.
Insurance Commissioner Roger Sevigny is also optimistic, although he is awaiting the economic impact study. “I think it will be a good thing if we can create economic development and jobs without severely affecting the state budget,” he told Insurance Journal.
Sevigny and Roussos noted that several midwestern states, including Illinois, Iowa and Nebraska, have had success lowering their premium tax but that no state on the eastern seaboard has done so.
The current proposal in the Granite State would cut the tax in half, from two to one percent.
“This could be an opportunity to make our state more attractive for insurers,” Sevigny said.
The study is expected by the end of the year, in time to fashion legislation for January.
The subject was a topic on the minds of property casualty executives who gathered at the White Mountains’ imposing Mountain View Grand Resort & Spa in Whitefield, N.H. last month.
At the Independent Insurance Agents & Brokers of N.H. (IIABNH) gathering, Dwight Bowie, chief executive officer of Peerless Insurance Co., put his company on record as supporting the tax cut, as did Patrick Haveron, president and chief executive officer of Preserver Group, Inc., and Michele Streton, who manages Progressive Insurance Co.’s auto accounts in Maine, New Hampshire and Vermont.
Reducing the premium tax from two to one percent or another figure could not only attract new companies but also serve to retain existing carriers, according to Bowie, whose parent, Liberty Mutual, is based in Massachusetts. Noting that Iowa has been successful in attracting insurers and recently reduced its premium tax to attract even more, Bowie commented, “The thinking is right. One percentage point can have a big impact.”
“We want to grow and this could be an incentive,” Preserver’s Haveron commented, noting that it would help shave expenses.