SB5 Alabama 2011 Session

Summary

Primary Sponsor

Ben H. Brooks

Republican

Co-Sponsors

Trip PittmanRusty Glover

Session

Regular Session 2011

Title

Homeowners insurance, counties contiguous to Mobile Bay and Gulf of Mexico, credits against insurance premium taxes for private property carriers who write coverage in Zones 1, 2, 3, and 4, geographic areas covered by Alabama Insurance Underwriting Association

Summary

SB5 creates tax credits for Alabama-licensed private homeowners insurers that write wind-covered policies in AIUA areas along the Gulf Coast and Mobile Bay to encourage more coverage.

What This Bill Does

The bill offers nonrefundable credits against the insurance premium tax for insurers that write wind coverage homeowners policies in counties contiguous to the Gulf of Mexico and Mobile Bay where properties are insured under the Alabama Insurance Underwriting Association (AIUA). The credit is 20% of the premium tax in Zone 4 and 35% in Zones 1-3, applied only to new policies with an effective date after the act and only for structures insured under AIUA at the time of writing. The credit may be claimed once per structure, and insurers must provide information to the Department of Insurance to verify eligibility and proper reporting of premiums; the Department will monitor use of the credits.

Who It Affects

• Insurers licensed or authorized to do business in Alabama that issue wind-covered, full-coverage homeowner policies in AIUA areas ( Zones 1-4) along the Gulf Coast and Mobile Bay; they can claim the credits against the premium tax.
• Property owners whose wind-covered policies are insured through the AIUA in those coastal counties; they may benefit from greater insurer activity and availability of AIUA-backed wind coverage.
• The Department of Insurance; it will verify eligibility for credits and monitor how credits are used.
• Properties insured under the Alabama Insurance Underwriting Association in the defined coastal areas, as eligibility for the credits is tied to AIUA coverage at the time of writing.

Key Provisions

• Provides a nonrefundable insurance premium tax credit to private property insurance carriers that write homeowners policies with wind coverage in AIUA areas contiguous to the Gulf of Mexico and Mobile Bay, for properties insured under AIUA at the time of policy writing.
• Credit amounts: 20% of the premium tax otherwise due for Zone 4, and 35% of the premium tax otherwise due for Zones 1-3, applicable to the tax year in which the policy is written.
• Credit is available only to insurers licensed or authorized to do business in Alabama for property and casualty policies providing full coverage as defined by the bill.
• Insurers claiming the credit must provide information to the Department of Insurance to prove eligibility and that the premiums were included in the insurer's gross income for the taxable year.
• A credit may be claimed only once per structure, regardless of the number of policies written for that structure.
• The Department of Insurance will monitor and examine the use of credits under this section.
• The credit applies to all new policies issued with an effective date after the act becomes law.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance