FPCA Action Alert: ABIR Seeks Opposition to Federal Reinsurance Tax Bill

FPCA Members:  Colodny Fass has been contacted by the President and Executive Director of the Association of Bermuda Insurers and Reinsurers (“ABIR”) regarding proposed legislation being considered by the House Committee on Ways and Means Subcommittee on Select Revenue Measures (“Committee”).

The Committee is considering HR 3424, a bill to amend the Internal Revenue Code to disallow the deduction for excess non-taxed reinsurance premiums with respect to United States risks paid to affiliates.  It is anticipated that this legislation, if enacted, would result in increased premium tax that would likely (1) be passed on to foreign insurers’ U.S. affiliates and, ultimately, to U.S. policyholders and consumers; or (2) result in costs being paid for out of the reinsurer’s capital base, thus decreasing capital available to provide capacity.

Members interested in opposing this legislation may submit written statements for consideration by the Committee and for inclusion in the printed record.  The deadline to submit written statements is close of business Wednesday, July 28, 2010.

Attached is a copy of HR 3424, as well as information for formatting and submitting written statements to the Committee.

Should you have any questions, please contact Megan Grant (mgrant@cftlaw.com).