The Captive Insurance Companies Association (CICA) renewed its support for the Coalition for Competitive Insurance Rates (CCIR), a group of individuals and organisations “opposing efforts to deny a tax deduction for certain reinsurance premiums paid to foreign-based affiliates by domestic insurers”, provisions for which are included in the US 2014 budget.
The CICA board of directors signalled its opposition to the budget by co-signing a letter from the CCIR to US legislators. The letter argues that the reinsurance business model is resilient and should not be compromised, and that the proposal “violates longstanding US tax policy” and that US consumers with great exposure to natural disasters like hurricanes in Florida and Californian earthquakes will suffer from added costs.
The letter reads: “as lawmakers continue to fight for aid to help rebuild from Hurricane Sandy and support farmers devastated by the drought, the US needs a robust insurance market that is open to as many competitors as possible and encourages foreign direct investment. We urge you to oppose this proposal that is supported by a small group of self-interested US insurance companies.”