Posted by & filed under News, Uncategorized.

WASHINGTON, D.C. (October 18, 2017) – News broke today that Assurant Inc. will acquire Chicago-based Warranty Group. According to reports, the acquisition paves the way for an inversion to Bermuda and will allow the new company to exploit the Insurance Tax Haven Loophole, which allows foreign based insurers to avoid paying federal taxes on reinsurance income generated in the U.S. The Coalition for American Insurance issued the following statement.

 

“It’s unfortunate that yet another company formerly based here in the U.S. has decided to shift its headquarters to Bermuda allowing it to avoid paying U.S. taxes on its reinsurance income. The news about Assurant Inc. is just the latest example of why the Insurance Tax Haven loophole must be closed in comprehensive tax reform. Foreign-based insurers should not be allowed to game the system like this and avoid paying taxes. The longer they are able to do so, the more costly this loophole becomes for taxpayers. The Joint Tax Committee estimates that the loophole will result in nearly $9 billion lost to the U.S. Treasury over the next decade. What’s more, its existence continues to incentivize an exodus of insurers to low or no-tax jurisdictions like Bermuda. Since the loophole was created nearly three decades ago, the share of U.S. based insurers in the U.S. insurance market has declined from 85 to 27 percent[1]. This must stop. A level playing field for all businesses operating within the U.S. reinsurance market is essential when it comes to taxes. Likewise, eliminating antiquated provisions in the current tax code that hamstring U.S. companies’ ability to compete in global markets will promote domestic growth and jobs.”

 

ABOUT THE COALITION –

The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes.

 

[1] source: Dowling & Partners, IBNR Weekly #49, Vol. XXIII, December 22, 2016

 

Share this:

Posted by & filed under News, Opinions, Uncategorized.

WASHINGTON, D.C. (October 5, 2017) – In an op-ed in The Morning Consult today, William R. Berkley, Executive Chairman of W. R. Berkley Corporation, Inc., states that closing the Insurance Tax Haven Loophole will be crucial to comprehensive tax reform. The op-ed reads in part:

“Proposals to close the loophole are not new. Both the George W. Bush and the Obama administrations supported closing the loophole. Democratic and Republican chairmen of the congressional tax-writing committees have offered similar proposals as well. It’s important to note that these proposals wouldn’t impose a new tax. Rather, they would ensure that existing taxes are paid by both foreign and U.S.-based insurance companies that operate in the U.S market. Such a fix is consistent with international trade agreements and tax treaties.”

Read the full op-ed HERE.

ABOUT THE COALITION

The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes.

Share this:

Posted by & filed under News, Uncategorized.

WASHINGTON, D.C. (September 27, 2017) – The Coalition for American Insurance issued the following statement today regarding the announced Framework for Tax Reform:

 

“The Framework’s emphasis on leveling the playing field between U.S. and foreign-headquartered parent companies is welcomed and the Coalition looks forward to working with lawmakers to achieve this objective. Also important is establishing an American model for global competitiveness. As the Framework states, the current tax code incentivizes the offshoring of profits – even if they are generated here in the U.S. – to avoid paying taxes. This hurts consumers and businesses based here in America. That needs to change. A simpler, fairer, modernized tax code is what’s needed to end the offshoring phenomenon and bring our nation’s tax code into the 21st century. A level playing field for all businesses operating within the U.S. market is essential when it comes to taxes. Likewise, eliminating antiquated provisions in the current tax code that hamstring U.S. companies’ ability to compete in global markets will promote domestic growth and jobs.”

ABOUT THE COALITION

The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes.

Share this:

Posted by & filed under News, Opinions.

WASHINGTON, D.C. (September 19, 2017) – A new academic article published in Tax Notes and authored by Jonathan Talisman, founding partner of Capital Tax Partners LLP, explains that the offshore affiliate reinsurance loophole must be closed to ensure tax fairness for U.S. and foreign based insurers operating in the U.S. market. Talisman notes that proposals to close the loophole do not impose a new tax but “closes a loophole to ensure that the current income tax imposed on all companies doing business in the United States is not avoided through the use of affiliate reinsurance.” Talisman represents the Coalition for American Insurance. An excerpt of the article is below.
“Insurance companies have two forms of income that are subject to tax: (1) underwriting income – generally, the amount by which premiums earned exceed losses incurred plus expenses; and (2) investment income – the earnings from investing reserves before claims are paid. Because the combined ratio for many lines of business is close to (or even more than) 100 percent, much, if not all, of an insurance company’s taxable income is derived from its investment income. Thus, if a foreign company is allowed to strip its reserves on its U.S. business to a low-tax country like Bermuda, the investment income on those reserves will be recorded as non-U.S. income and it effectively can avoid tax on most of the net income from U.S.-written business. Meanwhile, U.S.-based companies continue to pay tax on their U.S. business.
“That is why the affiliate reinsurance loophole offers tax nirvana for foreign-based insurance companies and why they are fighting so strenuously to keep it. Related-party reinsurance effectively enables foreign-based groups to shift their investment reserves on domestically written direct business to tax havens overseas, thereby allowing them to avoid U.S. tax on the bulk of their investment income. It also allows them to avoid U.S. rules requiring discounting of loss reserves, which accelerate the payment of taxes by U.S.-based groups. U.S.-based groups cannot achieve the same tax nirvana because the current tax rules require inclusion (under subpart F) in the U.S. tax base of any U.S. risks reinsured offshore.”

To read the full article, please visit this link (subscription required).

ABOUT THE COALITION

The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes.

Share this:

Posted by & filed under News, Uncategorized.

WASHINGTON, D.C. (September 12, 2017) – The Coalition for American Insurance issued the following statement today regarding the recovery efforts underway following Hurricanes Harvey and Irma.

“The member companies of the Coalition for American Insurance are committed to assisting those impacted by Hurricane Harvey and Hurricane Irma. Companies are contributing to relief efforts to help with immediate needs, deploying extra employees to impacted areas, and helping assess the damage to expedite the claims for our customers. As the recovery process moves forward, the members of the Coalition for American Insurance will continue to stay on the ground and help their customers and the impacted areas.”

For more on Coalition member company’s efforts, please visit their websites linked HERE.

 

ABOUT THE COALITION 

The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes.

 

Share this:

Posted by & filed under Graphics, News.

WASHINGTON, D.C. (September 12, 2017) – An obscure tax loophole is currently costing the U.S. taxpayers nearly $9 billion and must be closed in any comprehensive tax reform legislation, according to the Coalition for American Insurance. Doing so would create a level playing field for U.S. and foreign-based insurers and help pay for comprehensive tax reform. How the loophole works, how to fix it and why are explained in the infographic below.

Share this:

Posted by & filed under News.

WASHINGTON, D.C. (August 3, 2017) – A group of U.S.-based property and casualty insurers is relaunching the effort to close a tax loophole that benefits foreign-based insurers at the expense of U.S. customers and taxpayers. The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes. The Coalition has already written to lawmakers urging them to close the loophole.

Read more »

Share this:

Posted by & filed under News.

Coalition for American Insurance Commends Joint Statement on Tax Reform

 

WASHINGTON, D.C. (July 28, 2017) – The Coalition for American Insurance commended a joint statement from top lawmakers on the status of tax reform as progress on an issue of great importance to the nation’s economy. The statement from Congressional leaders and Administration officials emphasized the importance of “ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base.” The Coalition is urging lawmakers to close the Insurance Tax Haven loophole as part of comprehensive tax reform.

“The Coalition agrees with congressional and administration officials that any tax reform effort must create a level playing field for U.S. and foreign-based businesses, particularly insurers. The Insurance Tax Haven loophole was unintentional and allows foreign-based insurers to avoid paying taxes on the business they do inside the U.S. Meanwhile, American insurers are paying taxes on the exact same business. This isn’t right and should be changed as part of any comprehensive reform effort.”

ABOUT THE COALITION

The Coalition for American Insurance consists of twelve major U.S.-based insurance groups that employ hundreds of thousands of people within the United States. Coalition members provide millions of Americans with financial protection from unpredictable risks and pay substantial amount of federal, state and local taxes. The Coalition is seeking a level playing field and tax fairness for U.S.-based insurers and their consumers and employees by closing a current federal tax loophole that allows foreign-based insurers to avoid paying U.S. taxes.

Share this:

Posted by & filed under Letters, News, Opinions.

WASHINGTON, D.C. (July 17, 2017) – The Coalition for American Insurance is urging policymakers to close an obscure tax loophole that benefits foreign-based insurance companies operating inside the U.S. at the expense of American-based companies and taxpayers. In a letter to lawmakers, the Coalition argued that the Insurance Tax Haven Loophole, which allows foreign-based companies to move their profits from U.S.-based business into tax shelters based overseas to avoid paying U.S. taxes, should be eliminated. Closing the loophole would generate an estimated $9 billion in revenue to help pay for comprehensive tax reform. Excerpts from the letter are below. To read the full letter, please click HERE.

Read more »

Share this: