HM 617

1
House Memorial
2A memorial to the Congress of the United States, urging
3Congress to oppose any effort to impose new discriminatory
4taxes that would significantly limit the use of
5reinsurance provided by companies located outside the
6United States.
7
8     WHEREAS, reinsurance plays a vital role in managing and
9spreading risk for companies in nearly all segments of the
10insurance business, and
11     WHEREAS, as a means of managing capital, all large insurers
12make use of "affiliated" reinsurance purchased from companies
13within the same group, and
14     WHEREAS, such affiliated reinsurance serves a valid and
15important risk-transfer purpose that provides significant
16additional primary insurance capacity, particularly in areas
17such as crop, windstorm, general, liability, products liability,
18and aircraft insurance, and
19     WHEREAS, insurance groups that are not based in the United
20States currently pay taxes on reinsurance transactions which are
21functionally equivalent to the taxes paid by United States-based
22insurance groups, and
23     WHEREAS, a major study from the economic research and
24consulting firm, The Brattle Group, concluded that policies
25intended to reduce the use of affiliated reinsurance by
26companies whose headquarters are located outside the United
27States would result in a 20 percent reduction in the supply of
28reinsurance and a significant increase in the price of primary
29insurance for consumers and businesses, and
30     WHEREAS, such taxation would significantly limit the
31ability of many insurers to manage their capital and, thus,
32undermine the international risk-management practices at the
33heart of international reinsurance markets, and
34     WHEREAS, a broad coalition of industry, consumer, and free-
35market groups have spoken out against discriminatory taxation of
36offshore affiliated reinsurance, NOW, THEREFORE,
37
38Be It Resolved by the Legislature of the State of Florida:
39
40     That the Congress of the United States Congress is urged to
41oppose any effort to impose new discriminatory taxes that would
42significantly limit the use of reinsurance provided by companies
43located outside the United States.
44     BE IT FURTHER RESOLVED that copies of this memorial be
45dispatched to the President of the United States, to the
46President of the United States Senate, to the Speaker of the
47United States House of Representatives, and to each member of
48the Florida delegation to the United States Congress.


CODING: Words stricken are deletions; words underlined are additions.