A premium tax bill currently under consideration in the Alabama special legislative session would unfairly penalize insurers and ultimately discourage healthy competition in the state insurance market, according to the National Association of Independent Insurers.
H.B. 13, which would reduce the credits insurers currently have against the Alabama premium tax, would create a hidden tax that in all probability will never be repealed, said James S. Taylor, southeastern regional manager of the NAII.
“We understand the need for Alabama to raise more revenue for budgetary purposes, but insurers already contribute a substantial amount to the system,” Taylor said. Although some legislators estimate elimination of the tax credit will raise about $4 million a year, insurers believe the amount will be significantly higher.
Limitation or elimination of insurer tax credits will discourage insurers from entering the Alabama insurance market and ultimately hurt consumers through lack of competition, Taylor noted.
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