WASHINGTON–A key senator has requested feedback on proposed legislation that would close a loophole providing a tax advantage to some offshore insurers.
The discussion draft of proposed legislation released last week by Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, sets the stage for a long-anticipated showdown next year in Congress between the offshore insurers and their U.S. rivals.
The tax advantage exists because current tax law allows the U.S.-based affiliates of offshore insurers to cede a large share of their property casualty premiums to the reinsurance units of their parents, which are based in low-tax or no-tax jurisdictions, such as Bermuda.
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