Insurance Company Tax Breaks Could Lead To Premium Hikes

Business and insurance groups says the governor’s proposed elimination of a tax credit to insurers will increase premiums statewide.

Governor Snyder’s proposed 2016/17 budget would erase an $80 million tax credit used by insurance companies to offset the cost to cover uninsured drivers.

The Stop the Car Insurance Tax coalition says the change will hike premiums by $40 on average.

Pete Kuhnmuench of the Insurance Institute of Michigan, says insurers have been getting the credit for three years and it’s no surprise that polling shows most Michiganders oppose the change if it affects their premium costs.

But state Representative Al Pscholka, R-Stevensville, who plans to introduce a bill to eliminate the credit, says the tax break was given to insurers by mistake and the savings was never passed on to customers.

A survey by Lansing-based Marketing Resource Group says 73 percent of voters are against eliminating the credit. 18 percent support it.