Come Hell or High Water

captive-taxation-headshots

Back in July I wrote a blog about the possibility of some sort of border tax being proposed by Congress as part of a broader tax reform bill that could have a negative impact on the captive insurance industry.  Well, as I write this blog the House and Senate have passed versions of tax reform that both have an effect on our industry.

Now, here’s the deal with this bill: Congress is so desperate to pass a bill that shows they achieved something that this bill isn’t on the fast-track, it’s on a rocket with limited guidance control! So there will be a tax reform bill on the President’s desk by Christmas. Using the streamlined “budget reconciliation” process, the GOP needs only a simple majority in the Senate rather than the standard 60 votes, and because Republicans currently control 52 seats, victory seems assured provided defections are be minimized.

Its politics over policy, I am afraid. And though it seems certain that there will be a reduction in the corporate tax rate to 20%, both houses are looking for place to “pay for” these cuts in other areas, and insurance is a pretty easy target. Domestic reinsurers and specialty insurers would be the primary beneficiaries of tax reform, along with insurance brokers and standard commercial insurers, but captives with off-shore reinsurance agreements will be paying more. Relevant to the P&C insurance industry are provisions affecting net operating losses, discounted loss reserves, and, for P&C carriers with a diverse portfolio, the provisions affecting amortization of policy acquisition expenses.

Luckily for you all, VCIA will be presenting a webinar next week to try and make sense out of this chaos. On December 14th, a group of noted captive tax specialists will  also explore the recently introduced Tax Reform bill, its impact on captives, and the process it will go through to get passed by Congress.

Panelists include Daniel Kusaila and Thomas Jones, each of whom have been recognized by Captive Review as well as receiving numerous other industry awards, as well as Charles Boustany, Jr., MD, former U.S. Congressman on the influential House Ways and Means Committee and former chairman of the Subcommittee on Tax Policy.  Charles is currently a partner with Capitol Counsel LLC, a Washington law firm with expertise on taxation and insurance issues. His insight will bring great value to this session.

Click here to register today!

Thank you and I look forward to hearing from you.

Rich Smith
VCIA President

state-of-the-unionEvery year VCIA hosts a webinar for our members that provides an informative and timely update on VCIA legislative activities on behalf of our members and the industry.  We call it “Captive State of the Union” because, like the President’s address to Congress every January, this is a chance for our members to hear just what’s going on in Montpelier, Washington, and across the world.  I will be joined by Dave Provost, Deputy Commissioner for Captive Insurance at the Vermont Department of Financial Regulation, and Jim McIntyre, VCIA’s representative in Washington for an overview of new and pending regulations in the state and in Washington D.C. and the NAIC.  The webinar is for VCIA Members only and is free of charge!

This is a relaxed but informative hour where we will discuss issues like the potential impact of tax reform on captives, status of the Captive Insurers Clarification Act, the Vermont captive bill signed into law this past spring, and updates from the NAIC, including the proposed NAIC Insurance Data Security Model Law, XXX / AXXX regulations and proposal to collect expanded mid-year investment information, plus more.  So join us on October 19th from 2:00 – 3:00 pm ET and become informed!

Thank you and I look forward to hearing from you.

Rich Smith
VCIA President