Washington insurers want the Legislature to restore a tax offset stripped away from the industry three years ago, industry representatives said Monday.

But a time crunch and potential veto by Gov. Mike Lowery could foil the bid to reinstate the deduction for payments into an industry-administered fund used to cover claims against bankrupt companies.

“We would like to get this thing moved this week,” said Kenton Brine, president of the Washington Insurance Association.

Last year, Lowery vetoed a similar measure that was coupled with the rollback of a business and occupation tax increase.

The Legislature quickly passed the rollback again this session, and just as swiftly overrode a new veto.

But, noted Safeco Life Insurance Vice President Roger Harbin, the guaranty fund offset was not included in the B&O measure this time.

The bill to restore the tax break, S.B. 6184, is awaiting action by the Senate’s Ways and Means Committee, he said.

Without the offset, Safeco will pay an additional $825,000 in Washington premium taxes annually by 1999, when the 1993 repeal takes full effect, Harbin said.

And because other states may adjust taxes on insurers according to changes in the states where the companies are headquartered, he added, Seattle-based Safeco faces another $4 million in taxes outside Washington. Hiking rates to cover the additional costs puts the company at a competitive disadvantage, Harbin said.

Brine said the premium tax could also discourage companies considering location of an insurance office in Washington.

The association represents Safeco, State Farm, Progressive Corp., and Farmers Insurance, which together employ more than 5,000 and pay $25 million in premium taxes.

Total Washington premium taxes for the industry come to more than $150 million annually.

Washington Insurance Commissioner Deborah Senn opposed the offset in 1993 and continues to do so, spokesman Jim Stevenson said.

“She thinks the taxpayers ended up paying for a company’s insolvency,” he said.

Stevenson said the commissioner estimates reinstating the offset would cost Washington about $73 million over the next 10 years.

, DataTimes