Legislation has been introduced in both the House and the Senate that would reportedly increase the tax bills of P&C insurers ceding US risks to offshore affiliates by US$12bn over the next decade. The proposed legislation would prohibit P&C insurers from taking tax deductions as a result of ceding business to foreign affiliates. Rep. Richard Neal (D-Mass), Ranking Member of the House Ways and Means Select Revenue Subcommitte, and Sen. Robert Menendez (D-NJ), member of the Senate Finance Committee, have introduced H.R. 3157 and S. 1693, respectively. In a joint statement they explained the rationale behind the Bills, “foreign-owned companies [should] pay the same tax as American companies on their earnings from doing business here in the United States”.
H.R. 3157 was referred to the House Committee on Ways and Means on October 12, 2011. S. 1693 was referred to the Senate Committee on Finance on the same date. Prior versions of such Bills have been introduced but have failed to become law.