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Friday, Jan 27, 2023
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Fight Over Insurance Legislation Heightens

A group of U.S.-based insurers, including Zenith Insurance Company in Woodland Hills, rejected claims made in a study presented by foreign insurers fighting legislation that would tax offshore related-party transactions. The Coalition for a Domestic Insurance Industry, a group of 14 major U.S.- based insurance companies, have appealed to Congress to close what they say is a loophole that allows foreign insurers to avoid tax on U.S. business by shifting it to affiliates offshore. They believe the legislation that Rep. Richard Neal, D-Mass is expected to introduce in the near future, is essential to eliminate what they call an “unfair tax advantage”. However, a study written by the Brattle Group consulting firm on behalf of the foreign insurers, and presented today, claims that proposals in Congress would increase U.S. premiums across business lines by an average of 2 percent. That translates to an added $10 billion to $12 billion per year paid by Americans for insurance coverage, according to the analysis. The Coalition For a Domestic Insurance Industry rejected the assertions made in the report, and said the proposed legislation would not be punitive to foreign groups and would not adversely affect the U.S. insurance marketplace. “It’s irrational to think that a marginal cost increase to a small number of market players could materially change prices,” said William R. Berkley, a spokesman for the Coalition. Andrea Alegria

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