RIMS Underscores Opposition To Neal Tax Bill

by Mike Godfrey, Tax-News.com, Washington

20 July 2010

The Risk and Insurance Management Society (RIMS) has underscored its continuing opposition to any effort to move forward legislation in the United States that would increase taxes on foreign-based insurance companies and, therefore, the cost of insurance to its members.

The Society said that bill H.R. 3424, which was introduced by Congressman Richard Neal, will negatively impact its 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 was subject to a hearing on July 14 in the House of Representatives Select Revenue Measures Subcommittee, chaired by Neal.

Commenting, Scott Clark, RIMS secretary and director of RIMS External Affairs Committee, said: “The global insurance market insures Americans against the economic costs of these natural disasters and terrorism events.”

“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 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 USD10bn to USD13bn per year to purchase the same amount of insurance. The study also indicates that reinsurance capacity in the US would be reduced by 20% with the passage of the legislation, and that businesses across the country would have greater difficulty obtaining insurance.

Recommended