Representative Richard Neal (D – Mass.) introduced H.R. 6969 on September 18, 2008, in an attempt to alter the tax code and close what is described as a loophole allowing alien insurance carriers operating in the US to cede much of their reinsurance to off-shore siblings not encumbered by the US tax code. Currently, US-based affiliates of foreign-based insurers are allowed to place reinsurance with the affiliated alien carrier and can avoid paying taxes on the amount of the reinsurance premium.
Two national coalitions have squared off in this debate over the perceived tax advantages given to alien insurance carriers operating in the US and their off-shore reinsurer siblings. The Coalition for a Domestic Insurance Industry and the Coalition for Competitive Insurance Rates are battling over HR 6969′s attempt to change the tax code created in 1986 to impose tighter regulations on alien-owned insurance carriers and their related reinsurers (similar legislations was proposed in 2001 and 2007).
