Legislation was introduced this week to prevent foreign-controlled insurers operating in the United States from reducing their U.S. tax bill by reinsuring with their non-U.S. affiliates. Introduced by Rep. Richard Neal (D-MA) and Sen. Robert Menendez (D-N.J.), the proposed legislation would defer any available U.S. income tax deduction for reinsurance premiums paid to the offshore affiliate. This new proposed legislation is similar to legislation previously introduced by Rep. Neal and Sen. Menendez on this same point, although they say it addresses some of the concerns raised regarding such earlier proposals.

The actual text of either the House or Senate bills was not yet available as of the time of this posting. Once available, we will supplement this posting with a more detailed analysis.