Proposed Legislation To Close Affiliate Reinsurance Loophole Would Recapture Lost Revenue For U.S. Treasury

For Immediate Release
Contact: Karen Horvath
Phone: 203-629-3040

PROPOSED LEGISLATION TO CLOSE AFFILIATE
REINSURANCE LOOPHOLE WOULD RECAPTURE LOST
REVENUE FOR U.S. TREASURY

Companion bills restore competitive balance for U.S. insurers

(WASHINGTON, DC / May 21, 2013): The Coalition for a Domestic Insurance Industry today affirmed its strong support for H.R. 2054 and S. 991, important bicameral legislation re-introduced today by Congressman Richard E. Neal, ranking member of the House Ways and Means Select Revenue Subcommittee, and Senator Robert Menendez, a member of the Senate Finance Committee.
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President’s Budget Includes Measure To Close Tax Loophole That Favors Foreign-based Insurance Groups

For Immediate Release
Contact: Karen Horvath
Phone: 203-629-3000

PRESIDENT’S BUDGET INCLUDES MEASURE TO CLOSE TAX LOOPHOLE THAT FAVORS FOREIGN-BASED INSURANCE GROUPS

Foreign Insurers Use Deceptive Scare Tactics to Preserve Unfair Tax Advantage

WASHINGTON, DC (April 12, 2013) – A proposal in President Barack Obama’s FY 2014 budget would defer a tax deduction for reinsurance premiums paid to foreign affiliates by domestic insurers, thereby closing a tax loophole that costs the Treasury billions of dollars in tax revenues annually and provides foreign-based insurance groups a significant, unfair advantage over their U.S. competitors. Under the loophole, domestic insurance companies with foreign-based parents can escape U.S. tax on much of their underwriting and investment income derived from their U.S. business merely by reinsuring this business with a foreign affiliate in a low-tax or no-tax jurisdiction. This provides them an advantage over domestic groups in attracting capital for writing insurance to cover U.S.-based risks and erodes our tax base.
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Proposed Legislation To Close Affiliate Reinsurance Loophole Would Help Reduce Deficits

For Immediate Release
Contact: Cathleen Mayrose
Phone: 212-359-0053

Proposed Legislation To Close Affiliate Reinsurance
Loophole Would Help Reduce Deficits

Companion bills restore competitive balance for U.S. insurers
 

WASHINGTON, DC (October 12, 2011) – The Coalition for a Domestic Insurance Industry announced its strong support for (H.R. 3157 and S. 1693), important bicameral legislation introduced today by Congressman Richard E. Neal, ranking member of the House Ways and Means Select Revenue Subcommittee, and Senator Robert Menendez, a member of the Senate Finance Committee. The proposed legislation would close the current tax loophole permitting foreign-controlled property and casualty (P&C) insurers to avoid U.S. tax by stripping income generated in the United States into tax havens. Closing this loophole will benefit consumers by recapturing nearly $12 billion in revenue for the U.S. Treasury over a ten-year period, without affecting insurance prices or availability. Click here for the full post >

Contradictions in CCIR/Brattle Group Data Update Identified by Respected Global Expert Services and Consulting Firm LECG

For Immediate Release
Contact: Cathleen Mayrose
Phone: 212-683-0475

Contradictions in CCIR/Brattle Group Data Update Identified by Respected Global Expert Services and Consulting Firm LECG

WASHINGTON, DC (JULY 14, 2010) – A new report by respected global expert services and consulting firm LECG, reveals that the Neal Bill (H.R. 3424) will have no impact on Florida homeowner insurance rates or reinsurance capacity. In addition, the report applies the methodology from The Brattle Group Update directly in support of this finding.
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Covington & Burling LLP Affirms H.R. 3424 Does Not Violate Any U.S. Tax Treaties

For Immediate Release
Contact: Cathleen Mayrose
Phone: 212-683-0475

Covington & Burling LLP Affirms WTO-Consistency of H.R. 3424
Legislation to Close Loophole
For Excess Reinsurance Premiums Paid to Affiliates

WASHINGTON, DC (JULY 13, 2010) – Trade experts Stuart Eizenstat, John Veroneau and Jay Smith at Covington & Burling LLP issued an analysis concluding that H.R. 3424 (The Neal Bill), designed to recapture billions of dollars of U.S. tax revenue being stripped to offshore tax havens, is consistent with U.S. obligations under the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO). “H.R. 3424 seeks to close an income tax loophole, based on objective criteria, in a manner anticipated by Uruguay Round negotiators and fully consistent with GATS.”
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Online Astroturfing and Other Nifty Tricks from Foreign Insurers

Take a closer look at just about anything coming from the “Coalition for Competitive Insurance Rates” and the truth seems to get more out of focus. They say they want fair competition but they don’t want to pay the same taxes as their U.S. counterparts. They launch a campaign of scare tactics over capacity and pricing in the Coastal States – a market in which they have less than 2% market share. And they repeatedly conflate third party reinsurance (which adds market capacity) and related party reinsurance (which adds no market capacity) to intentionally confuse consumers and the U.S. Congress regarding the true intent of pending legislation.
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Foreign Insurers Use Deceptive Scare Tactics to Preserve Unfair Tax Advantage

U.S. Coalition Corrects the Record with YouTube Video Rebuttal

WASHINGTON, DC (June 23, 2010) Responding to a recent video by foreign insurers riddled with errors and inaccuracies, the Coalition for a Domestic Insurance Industry (CDII) released a video rebuttal today to ensure Congress and consumers have the facts regarding H.R. 3424.
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Coalition Refutes Statements by Gary Hufbauer

Gary Hufbauer, a Senior Fellow at the Washington-based Peterson Institute of International Economics, is quoted in a June 1st article by National Underwriter. Posted here is the full text of the story — with the full and complete facts included by the Coalition for a Domestic Insurance Industry in red to set the record straight.
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Coalition Refutes Statements in CCIR News Release

The Coalition for Competitive Insurance Rates (CCIR) yesterday issued the following commentary on a tax proposal on affiliated reinsurance included in President Obama’s FY2011 budget proposal.  That press release, however, is badly misleading — and contains many of the same errors and omissions that CCIR has been using to confuse the US Congress. Posted here is the full text of the release — with the full and complete facts included by the Coalition for a Domestic Insurance Industry in red to set the record straight. Click here for the full post… >

Foreign Insurers Mislead Congress on Tax Loophole

For Immediate Release
Contact: Cathleen Mayrose
Phone: 212.683.0475

Expert Debunks Report Circulated by Offshore Interests

WASHINGTON, DC (May 10, 2010) – A tax expert has challenged a report circulated by lobbyists for foreign insurers, saying it misleads Congress about a bill that will increase U.S. competitiveness and recover billions in U.S. tax revenue. The bill (H.R. 3424), introduced by Rep. Richard Neal, will eliminate a loophole that allows foreign insurers to avoid billions in U.S. taxes by stripping their U.S. profits offshore to low-tax or no-tax jurisdictions.

In today’s issue of Tax Notes, David Rosenbloom, Director of the International Tax Program at New York University’s School of Law and former International Tax Counsel at Treasury, denounced the report for misrepresenting H.R. 3424.
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