Indiana Targets Insurance for Economic Development

Former insurance industry advocate Mike Chrysler has recently been appointed as the Indiana Economic Development Corporation’s (IEDC) Director of Insurance Initiatives.

Chrysler, an Indiana native and former assistant vice president of government affairs for the Insurance Institute of Indiana, has worked for the past seven years in that position with the Indiana General Assembly on health, tort and personal lines issues.

As the state’s biggest industry cheerleader, Chrysler and the IEDC have the backing of Michigan Gov. Mitch Daniels, who has made industry development a priority in his administration.

With more than 60,000 Hoosiers working in the industry and more than 1,700 insurers licensed to sell in the state, Indiana has a strong base of skilled employees for companies to draw from. Two state universities, Ball State and Indiana State University, offer undergraduate insurance degrees, providing a steady stream of talent for the rapidly growing industry.

Indiana’s favorable tax, judicial and legislative climate offers efficiency and consistency to the insurance industry. Indiana’s 1.3 percent premium tax is among the lowest in the United States. Additionally, Indiana companies are offered a domestic preference to pay either premium taxes or the corporate income tax.

The IEDC Office of Insurance Development will focus on initiatives to encourage economic growth in the insurance industry. Key initiatives include:

• Working with insurers headquartered in Indiana or who otherwise have a physical presence in the state to encourage their growth and ensure that their needs are being met;

•Marketing Indiana’s advantages to the insurance industry in order to attract new companies to the state;

•Identifying and encouraging regulatory and legislative actions that support a competitive insurance marketplace in Indiana;

•Providing economic incentives that have not previously been made available to the industry.

As a first step toward meeting those goals, Chrysler and the IEDC are beginning to meet with existing domestics across the state to let them know about the program. Then they will target insurers in less competitive states or companies that have presence in the state through subsidiaries to convince them to relocate or do business in Indiana. The state currently has about 180 domestic insurers, including farm mutuals, Chrysler said.

“Indiana is an attractive regional headquarters site for companies headquartered on the east or west coasts,” he said, pointing to cities like Indianapolis, Fort Wayne and South Bend as places with trained workforces, high quality of life, and lower costs of living.

The group is also planning to work with the state legislature to promote changes to insurance regulation to encourage growth, including a payroll tax credit of 5 percent deductible from a company’s premium tax. The state currently has a file and use system with a 30-day deemer clause, but Chrysler would like to see the system more closely resemble that of Illinois, which he calls a “pretty compelling argument for deregulation.”

As a goal for “moderate” growth, Chrysler would like to see Indiana’s insurance workforce increase by 5,000 jobs by next year.

The IEDC replaced the Department of Commerce as a result of legislation passed by the Indiana General Assembly in Feb. 2005. The IEDC has a 12-member board chaired by Gov. Mitch Daniels.