Insurance commissioner urges cap and timing limits on insurer assessment credits to stabilize revenue

The Ways and Means Committee heard testimony on HB 11‑94 on March 4 after Representative (sponsor) introduced the bill at the Insurance Department’s request. Commissioner DJ Bettencourt said the bill would help the state avoid sudden swings in insurance premium tax (IPT) revenue when large insolvency assessments hit member companies.

Bettencourt told the committee that while domestic insurer failures in New Hampshire are rare, insolvencies in other states can still produce large assessments that ripple through premium‑tax receipts. “That safety net…can create unexpected swings in state revenue,” he said, and the proposal is intended “to smooth out that volatility” without undermining the Guarantee Association that pays covered claims.

Amy Duham, tax unit director for the department, described the mechanics the bill would change. Under current RSA provisions the law typically allows assessment credits equal to 20% of an assessment applied over five calendar years and limited by tax liability. HB 11‑94 would clarify the five‑year carry period, permit carriers to amend returns up to three years after filing, and, when total assessments in a year exceed $10,000,000, reduce the percentage allowed that year from 20% to 10%.

Duham used recent events to illustrate the effect. Colorado Bankers Life triggered a $35,000,000 assessment on New Hampshire annuity business; under current practice that could translate into $7,000,000 of allowable credits per year for five years and a doubled first‑year impact because of prepayment mechanics. She said the proposed threshold and percentage reduction would cut the worst‑case revenue hit roughly in half in that illustrative example.

Industry representatives signaled interest in working with the department but asked for technical changes. Henry Bayou of the American Council of Life Insurers said the $10 million trigger should be indexed for inflation and smoothed to avoid a cliff where a single dollar over the cap would meaningfully cut credits.

Committee members pressed on distributional and timing questions: whether the bill changes net revenue over time (department officials said the proposal smooths timing and, in their modeling examples, increases state receipts versus unbounded carryforwards), how annuity business is treated (annuities are not subject to premium tax in New Hampshire), and whether indexing or other adjustments are needed to avoid arbitrary cliffs.

The public hearing concluded without a committee vote; staff offered to schedule a work session to resolve technical language and indexing concerns.

What’s next: The committee closed the public hearing and signaled follow‑up work sessions to tighten statutory language and quantify potential revenue and industry impacts before any recommendation.