Bermuda’s reinsures petition US over tax changes

(Bernews): President Barack Obama’s inclusion of a proposal to deny tax deductions for certain reinsurance premiums paid to foreign-based affiliates by US insurers in his Budget plan has drawn criticism from Bermuda reinsurers. The Coalition for Competitive Insurance Rates (CCIR) — a Washington lobby group which includes the Association of Bermuda Insurers & Reinsurers [ABIR], European reinsurers and the Risk and Insurance Management Society (RIMS) — objected to the proposal in a letter sent to the chairmen and ranking members of both the US Senate Finance Committee and House of Representatives Ways and Means Committee.

“This is similar to legislation introduced in the 111th Congress by Rep. Richard Neal— legislation which was widely opposed by consumer advocates, insurance industry experts, and trade analysts,” said the letter, which was sent last week. “Unfortunately, this proposal is being advocated as a possible tax revenue offset by a small group of very large US insurance companies.With the enactment of this tax, these companies intend to create a US market share advantage for themselves at the expense of individual and commercial insurance consumers.”

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