There appears to be no prospect of quick passage for a bill tolower the Indiana state premium tax, according to aproperty-casualty insurance trade group lobbyist.

The approval by the House Insurance Committee yesterday is onlya first step, said Tami Stanton, regional manager of the NationalAssociation of Mutual Insurance Companies.

"The House Insurance Committee's unanimous approval of HB 1250is a tremendous start for the bill, but there is a long legislativeroad ahead," Ms. Stanton said.

By lowering the premium tax, she asserted, Indiana will be morecompetitive with states such as Illinois, Iowa, Nebraska, SouthCarolina and Wyoming that, in general, have lower premium tax ratesthan Indiana's current 1.3 percent.

Ms. Stanton added that HB 1250 will be assigned to the Ways andMeans Committee for another hearing due to the fiscal impact on thestate.

Steve Williams, president of the Insurance Institute of Indiana,said that the bill would make the state's premium tax one of thelowest in the nation, thus eliminating any retaliatory penaltiesIndiana domestics pay to write in other states.

According to testimony regarding fiscal impact provided by thestate and the insurance industry, the amount of money Indiana'sgeneral fund receives from insurers will continue to grow but at alower percentage rate under HB 1250.

The National Association of Insurance Commissioners reportsIndiana's total revenue from the insurance industry in 2004 was$183,455,189.

Authored by Rep. Craig Fry, D-Mishawaka, HB 1250 would lower thepremium tax rate over a 3-year period, beginning with a reductionto 1.2 percent in 2008, followed by 1.1 percent in 2009 and,finally, down to 1 percent in 2010.

The bill emanates from the Indiana Economic Development Council,the entity created by Republican Gov. Mitch Daniels, to strengthenthe Hoosier state's economic development strategy.

In testifying for the bill, Insurance Commissioner Jim Atterholtsaid when he meets with CEOs currently headquartered in otherstates, their first question is always about Indiana's premium taxrate.

Indiana previously lowered its premium tax with legislationpassed in 2001, which dropped the rate from 2 percent to 1.3percent over a five-year period.