The debate is over H.R. 3424, the so-called "Neal bill," sponsored by Rep. Richard Neal, D-Mass.
The proposal would disallow tax deductions for direct writing insurance companies in the United States that cede business to offshore affiliates.
Earlier this month, foreign reinsurers that oppose the bill, through a group called the Coalition for Competitive Insurance Rates, released a YouTube video in opposition to the bill. The video diagrams and explains the risk-sharing function of reinsurers.
"By spreading the risk around the world, insurance companies don't become overexposed, and [they] can provide consumers with lower prices--all thanks to reinsurers," the voiceover on the video says, also suggesting that the annual cost of the Neal bill to consumers would be $10-to-$12 billion.
Now, a group of domestic insurers, under the name Coalition for a Domestic Insurance Industry (CDII), has released its own YouTube rebuttal, which displays the foreign reinsurers' video with an additional voiceover contesting various points.
CDII's rebuttal states that H.R. 3424 is not a "new tax on foreign reinsurers," but rather legislation aimed at closing a loophole that allows U.S. subsidiaries of foreign-owned insurance groups to avoid taxes that apply to all U.S. companies.
The video contends that the Neal bill recapture an estimated $17 billion in revenue for the U.S. Treasury and will not adversely impact pricing or capacity.
CDII's 13 insurer members include W.R. Berkley Corp., Berkshire Hathaway Inc., The Chubb Corp., The Hartford Financial Services Group Inc., Liberty Mutual Group Inc., Markel Corp., The Travelers Companies Inc., Ambac Financial Group Inc., American Financial Group, EMC Insurance Companies, MBIA Inc., Scottsdale Insurance Company and Zenith Insurance Company.