WASHINGTON--(BUSINESS WIRE)--The Coalition for a Domestic Insurance Industry strongly supports President Obama’s efforts to end unfair tax advantages currently enjoyed by foreign-controlled insurance companies operating in the U.S.
“We are extremely encouraged that the President has renewed his commitment to end a tax loophole that harms the domestic competitiveness of U.S.-based insurers and costs the U.S. Treasury billions of dollars annually,” stated William R. Berkley, Chairman and CEO of W. R. Berkley Corporation.
The President’s budget proposal seeks to eliminate a flaw in our tax code that is being exploited by foreign-based insurance groups to strip their income from writing U.S. business offshore (through reinsurance transactions with affiliates), and avoid paying virtually any U.S. tax. Closing this loophole soon is critically important to retaining a vibrant and competitive domestic insurance industry. Absent change, trillions of dollars of capital and invested assets will migrate overseas, and the attendant tax revenues will be lost.
Opponents to the bill have attempted to block progress by claiming that closing this loophole will adversely affect insurance prices. However, a new economic analysis prepared by respected global insurance expert services and consulting firm LECG refutes these claims. According to LECG, opponents fail to make a “compelling case” that closing this loophole will adversely affect insurance capacity or consumer pricing, and their claims “should be viewed with a great deal of skepticism by policymakers and others.”
The full text of the LECG report and further information regarding efforts to close this unfair loophole may be accessed at: http://www.coalitionfordomesticinsurance.com/resources/LECGBrattleCritique.pdf
The Coalition for a Domestic Insurance Industry represents thirteen U.S.-based insurance groups with more than 150,000 employees in offices located throughout the United States. Collectively, we pay billions of dollars in taxes, invest significantly in the municipal bond market, and offer millions of U.S. individuals and businesses financial protection from unpredictable risks. Please visit www.coalitionfordomesticinsurance.com for more information.