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.
The bill, introduced by Representative Richard Neal, will close a loophole that enables offshore insurers to avoid billions in U.S. taxes.
The coalition video rebuttal, found here, clarifies that:
- Reinsurance transactions with affiliates do not add additional capacity to the market; they simply allow foreign-owned insurers to strip profits overseas into tax havens to avoid paying their fair share of U.S. taxes.
- H.R. 3424 is not a new tax on foreign reinsurers. The legislation would merely close a loophole allowing U.S. subsidiaries of foreign-owned insurance groups to avoid taxes that apply to all U.S. companies.
- H.R. 3424 will not affect insurance pricing or availability. Foreign-owned insurers collectively represent less than 2% of homeowners insurance in all coastal states. Taxes are already built into the prices consumers pay – foreign-owned insurers just get to pocket the extra profits.
- The legislation will benefit consumers. It will recapture an estimated $17 billion in revenue for the U.S. Treasury. At a time of burgeoning federal deficits, and as American consumers and businesses face tax increases, it is wrong to allow foreign-owned insurers to avoid U.S. taxes on their U.S.-based business.
- There will be no adverse impact on catastrophic claims paying ability as a result of the legislation, as third party reinsurers will continue to provide needed capital for catastrophes.
- Statistics cited by foreign insurers regarding claims paid after Katrina, Rita and Wilma all involve third party reinsurance, which is not affected by H.R. 3424.