Competing U.S. and Bermuda insurance interests have been ramping up lobbying efforts on Capitol Hill over a proposed tax code change that would impact treatment of U.S. business ceded to Bermudian carriers.
The issue has been heating up since last December when, following a hearing, Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee, issued a draft proposal to disallow the ability of foreign insurers to deduct excess non-taxed reinsurance premiums ceded by their U.S. affiliates to offshore units.
The draft generated 35 responses in opposition from state regulators, foreign governments, U.S. trade interests, consumers, the Risk and Insurance Management Society, and insurers and trade associations. These included letters from the governments of Germany and Switzerland.
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