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Senate committee adopts amendment to stretch insurer insolvency tax credits over 10 years
Summary
The Senate Ways and Means Committee approved an amended version of House Bill 1194 to change how insurance‑guarantee assessments are credited against carriers' premium tax, replacing a proposed cap with a 10‑year, 10% spread to smooth revenue volatility after large insolvencies.
The Senate Ways and Means Committee voted to advance House Bill 1194, as amended, to modify how the insurance guarantee‑fund assessment credits are claimed against carriers' insurance premium tax following an insurer insolvency.
Representative Tom Shamburgg, the bill's sponsor in the House, told the committee the measure is a fiscal‑stability bill that ‘‘does not increase taxes’’ but instead smooths the state’s exposure to sudden, multi‑million‑dollar swings in revenue when large insurers fail. ‘‘This $10 million cap in House Bill 1194 smooths the impacts on state revenue while ensuring insurers are repaid, just not all at once,’’ Shamburgg said during the public hearing.
DJ Bettton Court, commissioner of the New Hampshire Insurance Department, explained how the guarantee fund works: carriers front assessments to cover claims when a carrier becomes insolvent, then receive credit against premium‑tax liability. He and Deputy Commissioner Keith described an amendment developed with industry that replaces a difficult‑to‑administer $10 million aggregate cap with a simpler timing change that allows assessment credits to be claimed over 10 years at 10% per year rather than the existing 5‑year/20% schedule.
Henry Veu of the American Council of Life Insurers said the trade group worked with the department and supported the compromise, describing it as ‘‘a much simpler model’’ that spreads the revenue impact from a catastrophic insolvency and eases administration for both carriers and the state. Committee members repeatedly asked whether removing the cap would expose taxpayers; the department replied that large insolvencies are rare and the amended approach ‘‘does not negatively impact the revenues.’’
The committee also approved a separate housekeeping amendment to clarify that sports betting exemptions apply only to lottery‑authorized vendors; that amendment was requested by the lottery and the attorney general and was adopted as part of the committee package. The committee approved the bill as amended and placed it on consent to be reported out by the Senate majority.
The next procedural step is transmittal to the full Senate with the committee's recommendation. The committee record shows amendments 1301 and 1237 adopted and the bill advanced as amended.
