Clinton would cut tax benefit for foreign insurers
April 3rd, 2008 | by admin |By Lilla Zuill
NEW YORK, April 3 (Reuters) - Democratic presidentialhopeful Hillary Clinton, as part of a broad plan to boost thefortunes of U.S. workers, said late on Wednesday she wouldclamp down on tax benefits to foreign insurers doing businessin the United States, if elected.
Under a plan referred to as an “insourcing” agenda,Clinton proposed a wide range of initiatives to create $7billion a year in new tax benefits and investments for firmsthat create U.S. jobs, and to help domestic insurers by cuttinga benefit to foreign insurers.
In specific, Clinton would “eliminate the unfair advantagethat foreign insurers located in tax havens have against U.S.insurers competing for U.S. business,” according to a statementon the proposal.
Clinton added the issue to her agenda as a coalition ofU.S. insurers ramps up its effort to convince legislators toclose what they call a “tax loophole” which allows foreigninsurers with U.S. operations to cut their income tax throughoffshore reinsurance arrangements.
“The Coalition for a Domestic Insurance Industry” is a14-member group that includes W.R. Berkley Corp (BER.N: Quote, Profile, Research) AmbacFinancial Group Inc (ABK.N: Quote, Profile, Research), American Financial Group Inc,Berkshire Hathaway (BRKa.N: Quote, Profile, Research), the Chubb Corp.(CB.N: Quote, Profile, Research), EMCInsurance Companies, MBIA Inc (MBI.N: Quote, Profile, Research) and Hartford FinancialServices Group (HIG.N: Quote, Profile, Research).
In a letter last year to the House Ways and MeansCommittee, the coalition called on legislators to adjust thetax code that applies to certain transactions involving theU.S. operations of foreign insurers or there would be a riskthat “foreign domiciled insurers will continue to use their taxadvantage to gain a greater share of the U.S. insurancemarket.”
A Clinton spokesman was not immediately available toprovide more detail on what her plan would entail.
Coalition spokesman William Berkley told Reuters in anearlier interview that his group proposes a change to “levelthe playing field” between U.S. insurers and foreign companieswith U.S. operations, so “the tax rate (would) be adjusted sothey are taxed more appropriately on (their) domesticbusiness.”
Under a reinsurance agreement, the reinsurer assumes someof the risk in policies that an insurer has already sold tocorporations and individuals. (Reporting by Lilla Zuill; Editing by Tim Dobbyn)
