This bill amends the existing law regarding tax credits for assessments paid by member insurers to the New Hampshire Life and Health Insurance Guaranty Association (NHLHIGA). It introduces new legal language that allows member insurers to utilize eligible assessment credits to offset their tax liabilities under RSA 400-A. The bill establishes a maximum aggregate annual limitation of $10 million on the total amount of eligible assessment credits that can be recognized by all member insurers in any calendar year. If the eligible credits exceed this limit, the excess will be classified as deferred credits, which can be carried forward for up to seven consecutive years. Additionally, the bill specifies that no member insurer can recognize more than 14.28% of the aggregate annual limitation from deferred credits in any given year unless the commissioner determines otherwise.

The bill also modifies the percentage of eligible assessment credits that can be recognized in a calendar year, reducing it from 20% to 10% if the total eligible credits exceed $10 million. This change aims to mitigate large, unpredictable revenue losses for the state during years with high NHLHIGA assessments, which occur when an insurance company becomes insolvent. The bill clarifies the reporting requirements for member insurers regarding eligible and deferred credits and stipulates that any refunds received from the association that were previously recognized as credits must be remitted to the state. The effective date of the act is set for 60 days after its passage.

Statutes affected:
Introduced: 408-F:13
HB1194 text: 408-F:13