RIMS maintains tax on foreign-based insurance companies will have
crippling effect on consumers
NEW YORK (July 14, 2010) — The Risk and Insurance Management Society, Inc. (RIMS) today announced its continuing opposition to any effort to move forward legislation that would increase taxes on foreign-based insurance companies and, therefore, the cost of insurance to its members.
H.R. 3424, which was introduced by Rep. Richard Neal (D-MA), will negatively impact members nationwide, but particularly those in regions threatened by natural disasters and terrorism events, as they depend largely on foreign-based reinsurers to protect them. The bill will be the subject of a hearing today in the House of Representatives Select Revenue Measures Subcommittee chaired by Rep. Neal.
“The global insurance market insures Americans against the economic costs of these natural disasters and terrorism events,” says Scott Clark, RIMS secretary and director of RIMS External Affairs Committee and risk and benefits officer for Miami-Dade County School Board. “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. With a national economic recession and an international financial crisis, we don’t need to raise taxes on international insurers, as Rep. Neal has proposed.”
A 2009 study by The Brattle Group, the results of which were reaffirmed by its more recent 2010 report, finds that consumer costs would go up anywhere from $10 to $13 billion per year to purchase the same amount of insurance. The study also indicates that reinsurance capacity in the U.S. would be reduced by 20 percent with the passage of this legislation, and that businesses across the country would have more difficulty obtaining insurance.
For more information on RIMS’ legislative initiatives, please visit the RIMS Legislative Action Center.