A new law requires foreign insurers receiving U.S.-source premiums to submit a form to the IRS.
The new law is the Foreign Account Tax Compliance Act (FATCA). It went into effect July 1. The Treasury Department implemented it despite a strong lobbying effort by the property and casualty insurance industry earlier this year to delay its implementation and reduce its impact through clarifications of the rule implementing it.
The law generally requires that foreign insurers receiving U.S.-source premiums provide W-8BEN-E forms to their U.S. insurance brokers to demonstrate that they are either FATCA-compliant or FATCA-exempt in order to avoid otherwise mandatory 30% withholding.
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