HM 617

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

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