HB440 Alabama 2014 Session

Summary

Primary Sponsor

David SessionsSenator

Republican

Co-Sponsors

Steve McMillanJames E. BuskeyJoe FaustHarry ShiverChad FincherNapoleon BracyAlan BakerVictor GastonMargie WilcoxAdline ClarkeRandy Davis

Session

Regular Session 2014

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, Sec. 27-1-24.1 am'd.

Summary

HB440 changes the tax credits for private property insurers writing residential wind coverage, replacing the old zone structure with new zones and credit percentages.

What This Bill Does

If enacted, insurers licensed in Alabama that issue homeowners policies with wind coverage for properties insured through the Alabama Insurance Underwriting Association would be eligible for a nonrefundable credit against the insurance premium tax. The credit would be 20% of the premium tax in Zones M4, M5, B4, and B5, and 35% in Zones M1, M2, M3, B1, B2, B3, and South ICWW. The credit is claimed for the taxable year and can only be used for policies meeting certain criteria, including that the wind/hail portion of the premium is at least 12% less than the Wind Pool Plan premium, and it requires documentation to the Department of Insurance; it applies only to new policies with an effective date after August 1, 2012, and is subject to monitoring by the Department. The act becomes effective after governor approval.

Who It Affects

• Insurance carriers licensed in Alabama that provide full property and casualty coverage including wind to homes in the defined zones and whose policies are insured through the Alabama Insurance Underwriting Association; they would claim a nonrefundable credit against the insurance premium tax set by law (percent varies by zone).
• The Department of Insurance (and the state's tax administration) responsible for verifying eligibility, processing credit claims, and monitoring use of the credits.

Key Provisions

• Replaces the existing wind-coverage premium tax credits ( Zone 4 = 20%, Zones 1-3 = 35%) with new zone credits: 20% in Zones M4, M5, B4, B5 and 35% in Zones M1, M2, M3, B1, B2, B3, and South ICWW.
• Credits are nonrefundable and may be claimed against the insurance premium tax for policies written on properties insured through the Alabama Insurance Underwriting Association.
• Eligible insurers must be licensed in Alabama and provide full property and casualty coverage (including wind/hail) for properties in the defined zones at the time of writing.
• A credit for a taxable year may be claimed only once per structure, regardless of multiple policies.
• Insurers must provide required information to the Department of Insurance to demonstrate eligibility and that premiums were not excluded from gross income.
• To qualify for credits, wind/hail coverage must be priced at least 12% less than the Wind Pool Plan premium for the homeowner.
• The Department of Insurance will monitor and examine the use of the credits.
• The act applies to new policies issued with an effective date after August 1, 2012.
• Effective date: the act becomes law on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Insurance