SB254 Alabama 2014 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Bill Hightower
Republican
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: SB254 updates Alabama's Coastal Insurance Reform Act by changing wind-coverage tax credits for coastal insurers, removing a required premium-discount condition, and setting new rules for how credits are earned and awarded.
What This Bill Does
It creates zone-based, nonrefundable insurance premium tax credits for private property insurers writing wind coverage in designated coastal areas, with 35% credit in Zones 1-3 and Gulf Front zones and 20% in Zone 4, capped at $50,000 per tax year. It requires licensed Alabama insurers to provide information to the Department of Insurance to prove eligibility, and the department will issue tax credit certificates reserving credits in order of application. It also removes the previous requirement that a premium discount of at least 12% be given to homeowners to qualify for the credit, and it applies only to new policies issued after August 1, 2012. The act becomes effective on the first day of the third month after its passage and approval.

Who It Affects
Private property insurers licensed to do business in Alabama that write homeowners policies including wind coverage in the defined coastal zones; they may qualify for nonrefundable tax credits against their insurance premium tax, with specific percentages and an annual cap, contingent on department approval and application.
Homeowners in the coastal counties whose wind-inclusive policies are insured through the Alabama Insurance Underwriting Association (AIUA) and fall within the defined zones; the credits are issued to insurers, not directly to homeowners, though the program concerns policies issued post-2012 and may influence premium considerations.

Key Provisions
Name and scope: The act is titled the Alabama Coastal Insurance Reform Act of 2014 and amends Section 27-1-24.1 to provide wind-coverage tax credits for policies in Zone definitions linked to Alabama coastal areas.
Credit amounts: 35% of the insurance premium tax for Zones 1, 2, and 3 (Gulf Front, B1-B3, M1-M3 or successors) and 20% for Zone 4 (B4, B5, M4, M5 or successors).
Annual cap: The total credits claimed in any tax year may not exceed $50,000.
Eligibility and process: Only licensed Alabama insurers with full coverage policies may claim the credit; insurers must provide information to the Department of Insurance, which will issue tax credit certificates reserving the credits and process applications in order received.
Per-structure limit: A credit may be claimed only once per structure, regardless of the number of policies written for that structure.
Removal of premium-discount requirement: The prior rule that a homeowner must receive a premium payment at least 12% less than the Alabama Wind Pool Plan premium to qualify for the credit is removed.
Applicability and effective date: The credits apply to new policies with an effective date after August 1, 2012, and the act becomes effective on the first day of the third month following its passage.

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