RIMS Opposes Legislation to Increase Tax on Non-U.S. Reinsurers
NEW YORK (September 22, 2008) --The Risk and Insurance Management Society, Inc. (RIMS) announced its opposition to legislation disallowing tax deductions for reinsurance premiums paid to foreign affiliates that exceed the industry average for each line of property and casualty insurance business. The legislation, H.R. 6969, was introduced on Friday by Rep. Richard E. Neal, D-Mass., a senior member of the U.S. House of Representatives Committee on Ways and Means.
"RIMS opposes any legislation that would result in negative implications for the global reinsurance marketplace and U.S. businesses that rely on this market," says Terry Fleming, member of RIMS board of directors and director of the division of risk management for Montgomery County, Maryland. "It is RIMS belief that a free and fair marketplace fosters a healthy and competitive climate for reinsurance while at the same time assures more available and affordable property and casualty insurance."
Under the current tax code, the law permits insurers to deduct reinsurance premiums paid to affiliate foreign reinsurers without any limitations. The legislation would place an artificial cap on the deduction, potentially causing market disruptions. Over the years, non-U.S. reinsurers have served as an important backstop ensuring the availability of insurance, particularly in areas prone to natural disasters. RIMS opposed similar legislation in 2001 and 2007.
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As the preeminent organization dedicated to advancing the practice of risk management, RIMS, the Risk Management Society™, is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities throughout the world. Founded in 1950, RIMS brings networking, professional development and education opportunities to its membership of more than 11,000 risk management professionals located in more than 60 countries. For more information on RIMS, visit www.RIMS.org.
For more information, contact:
Josh Salter, RIMS communications manager, (212) 655-6059 or jsalter@RIMS.org