Legislation to tax Bermuda reinsurers resurrected in US Congress
RJ Lehmann, a fellow with the R Street Institute, a non-profit policy research organisation, says in the end, the legislation would only benefit a small group of US insurance companies at the expense of American consumers.
“This is a protectionist measure that serves the interests of certain large domestic insurance companies by discouraging foreign-based competitors from devoting their capital to US risks.
“It also is simply bad policy, in that it would tend to concentrate US risks within the United States, rather than allowing the global reinsurance system to spread them throughout the globe,” he said.
Mr Lehmann also added that the legislation appears to violate the United States’ commitment under the General Agreement on Trade in Services not to subject companies to more punitive or burdensome taxation based solely on where the company is based.