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RIMS Opposes Tax Penalty on Reinsurers 5/22/2013

 

 

Proposed Legislation Threatens Global Insurance Markets,

Potentially Costing U.S. Consumers Billions

NEW YORK (May 22, 2013)RIMS, the risk management society™, voices its disapproval of legislation introduced by Rep. Richard Neal (D-MA) and Sen. Bob Menendez (D-NJ) that would place significant restrictions on domestic insurers which cede reinsurance to their foreign affiliates. According to a 2009 Brattle Group study, the legislation would contract the reinsurance market by 20 percent and force U.S. consumers to pay more than $10-$12 billion more a year for insurance.

In April, RIMS delivered an official letter to the House Ways and Means Committee’s International Tax Reform Working Group to affirm the Society’s disagreement with the Administration’s Proposed 2014 Budget that included an effort to eliminate the tax deduction for reinsurance premiums ceded by domestic insurers to their foreign affiliates.

“Engaging in offshore reinsurance programs is a legitimate practice that has proven over time to be an effective tool to keep insurance premiums low while providing countless organizations with the capacity to keep their assets safe,” said Carolyn Snow, RIMS Board Liaison to the Society’s External Affairs Committee.  “This short-sighted legislation fails to realize that if organizations are forced to abandon their offshore counterparts, the financial burden of catastrophic risks would fall on the government and policyholders – an alternative that could shatter this country’s economic vitality.”  

For more information about RIMS External Affairs initiatives or about the RIMS International Committee, visit www.RIMS.org.


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About RIMS

As the preeminent organization dedicated to educating, engaging and advocating for the global risk community, RIMS, the risk management society™, is a not-for-profit organization representing more than 3,500 corporate, industrial, service, nonprofit, charitable and government entities throughout the world. RIMS has a membership of approximately 11,000 risk practitioners who are located in more than 60 countries. For more information about the Society’s world-leading risk management content, networking, professional development and certification opportunities, visit www.RIMS.org.

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For more information, contact:

Josh Salter, RIMS communications manager, (212) 655-6059 or jsalter@RIMS.org

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