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State Taxes and Fees

Premium Tax on Life Premiums

Face amount equal to or less than $5,000 .5%
Face amount greater than $5,000 up to and including $25,000 1.0%
Face amount greater than $25,000 2.3%

Premium Tax on Health Premiums

Groups less than 50 participants .5%
All other Health 1.6%
Medicare and Medicaid supplement policies and employer sponsored plans for governmental employees are exempt from premium tax.

Premium Tax on Property and Casualty Premiums

Property and multi-peril insurance written in fire protection classes 9 and 10 1.0%
Mobile home and low value dwelling policies with a face value of $40,000 or less 1.0%
Medical malpractice policies 1.6%
All other property and casualty premiums *3.6%
* May be reduced according to the number of employees and offices in Alabama, or if the company owns at least $1,000,000 investment real estate in Alabama.

Taxes and Fees Payable to the Department of Revenue

Section 40-14a-21 to 40-14a-29 Privilege Tax. The tax rate is determined by the company’s total income allocated to Alabama. The amount of tax is determined by multiplying the taxpayer’s net worth in Alabama by that rate.

Municipal License or Privilege Taxes *

Municipalities may charge a license or privilege tax on net premiums received on business written in the community not to exceed the following amounts. Net premiums are gross premiums less returned premiums. See sections 11-51-120 and 121, Code of Alabama, 1975.

The Alabama Department of Insurance does not administer or collect municipal taxes. The Alabama League of Municipalities at (334)262-2566 or an individual municipality may be able to assist you if you have questions concerning your municipal taxes.

Section 11-51-121, Code of Alabama, 1975

Population of Municipalities Life and Casualty
Less than 5,000 $10 and $1 per 100 or major fraction thereof on business written in the previous year
5,000 to 10,000 $15 plus as above
10,000 to 50,000 $20 plus as above
50,000 or over $50 plus as above

Section 11-51-120, Code of Alabama, 1975

Fire and Marine business, all municipalities 4% of net premiums.

* Municipal license fees/privilege taxes not allowable deductions from premium taxes.

Taxes, Fees and Other Charges

Payable to Commissioner of Insurance State of Alabama

Fees for admission 500.00
Issuance of original Certificate of Authority 500.00
Seal 5.00
Non-refundable application examination fee 1,750.00
Total fees for admission $2,755.00
HMO application fee 50.00
HMO non-refundable application examination fee 250.00
Other Fees and Charges
Filing HMO annual statement 20.00
HMO annual renewal of license 200.00
Annual renewal of license for insurance company 500.00
Reinstatement fee 500.00
Filing of annual statement 25.00
Examination of annual statement 950.00
Examination of report of examination 250.00
Examination of annual statement - Mutual Aids, Fraternals 325.00
Examination of annual statement - HMO 400.00
Filing of amendment to Articles of Incorporation 25.00
Filing other charter documents or by-laws 25.00
Stock solicitation permit 250.00
For copies of documents, records on file, per page 1.00
For certificates under seal other than agent’s license 5.00
Accepting service of legal process by Commissioner of Insurance 50.00
Filing Fraternal annual statement 10.00