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8th of February 2012

RIMS voices objections to reinsurance tax proposals

Gavin Bradshaw 21/07/2010

The Risk and Insurance Management Society (RIMS) has announced its continuing opposition to a bill proposing increased taxation of offshore reinsurance taxations.
 
HR 3424, which was introduced to the US Congress by Massachusetts Representative Richard Neal, was the subject of a hearing on 14 July in the House of Representatives Select Revenue Measures Subcommittee, chaired by Rep Neal.
 
Proponents of the bill say the current system creates an unlevel playing field for (re)insurers and are seeking to limit the tax deductions open to reinsurers that ceding portions of US premium to offshore affiliates.
 
RIMS argues the bill will have a negative impact on its membership nationwide, but particularly those in regions threatened by natural disasters and terrorism events.
 
“The global insurance market insures Americans against the economic costs of these natural disasters and terrorism events,” said Scott Clark, RIMS secretary and director of its External Affairs Committee, in a statement.
 
Clark, who is also risk and benefits officer for Miami-Dade County School Board added that: “RIMS membership ranges from small businesses to Fortune 100 companies to universities, hospitals and public sector entities and they will all feel the repercussions of this legislation.”
 
RIMS said a 2009 study by financial and economic consultants The Brattle Group found that consumer costs would go up anywhere from $10bn to $13bn billion per year to purchase the same amount of insurance.
 
It said the study also indicated that reinsurance capacity in the US would be reduced by 20% with the passage of the legislation.

Tags: Offshore, Reinsurance, RIMS

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