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New Tax Target Emerges: The State Insurance Premium Tax

Here's something we haven't seen before: two of three candidates running for state insurance commissioner suggesting either reducing or repealing the state's insurance premium tax....
October 27, 2010

Here's something we haven't seen before: two of three candidates running for state insurance commissioner suggesting either reducing or repealing the state's insurance premium tax. It's happening in Georgia.

Perhaps it's a symptom of widespread anti-tax sentiment this year. Nevertheless, it is unusual to hear candidates for insurance commissioner proposing slashing insurance premium taxes, such a major source of state revenue. How major? According to the Insurance Information Institute (I.I.I.), insurance companies, including life/health and property/casualty companies, paid $15.7 billion in premium taxes to the 50 states in 2008. Premium taxes accounted for 2.0 percent of all taxes collected by the states in 2008.

In the Georgia Commissioner's race, Democrat Mary Squires says one of the ways Georgia might increase the number of insurers and jobs in the state is to lower its premium tax. Libertarian Shane Bruce wants to go further, eliminating it entirely. Republican Ralph Hudgens has not made the premium tax an issue.

According to an Insurance Journal survey, Democrat Squires and Republican Hudgens agree on the importance of the role played by independent insurance agents in the insurance system, while the third candidate, Libertarian Bruce, fears the best days for independent agents may be behind them, saying he thinks independent agents may have peaked several years ago.

Click here to read Georgia Insurance Commissioner Race (Insurance Journal 10/21/10)