H.B. 801 cuts the state’s life insurance valuation fee, or tax, to $1 per $100,000 of coverage, down from the current $1.50 rate per $100,000. The current rate was due to an increase during the 2003-2004 budget cycle, in an effort to increase revenue.
According to an analysis by state Senator Joe Conti of Doylestown, Pa. “The higher valuation fee has not brought in the revenue the administration expected, namely because a few life insurance companies have 'redomesticated,' or moved their main businesses, out-of-state.” Conti went on to say, “Tax policy should encourage businesses to locate here, not penalize them from doing so.”
The second bill, S.B. 1043, “authorizes the state to pay for the maximum amount of life insurance coverage available to members of the Pennsylvania National Guard through the federal Servicemembers’ Group Life Insurance program.”
Doesn’t seem like much but that .50-cent decrease will entice some insurance companies to move back into state.
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