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Bismarck, N.D. (AP) A Bismarck state senator says North Dakota's insurance premium tax on nonprofit health insurance companies should be abolished.

Democrat Tracy Potter is drafting the proposal for the Legislature's interim Industry, Business and Labor Committee. He says it will give Blue Cross Blue Shield of North Dakota a chance to reduce its rates.

In North Dakota life insurance premiums are taxed at 2 percent.

Health, property and other forms of insurance are taxed at 1.75 percent. Potter says his legislation will apply only to nonprofit health insurers.

Insurance Commissioner Adam Hamm says he's studying the idea. He says the Blue Cross Blue Shield and Medica companies are the biggest health insurance nonprofits doing business in North Dakota.

He says during the last budget year, they paid $7.5 million in premium taxes.

(Copyright 2009 by The Associated Press. All Rights Reserved.) APNP 11-16-09 0501CST | save this article / add to your favorites list