Washington–Legislation clarifying the scope of a tax exemption for small property-casualty insurance companies was introduced in both the House and the Senate before Congress departed for its annual summer recess.
The bills would modify existing law to say that "gross receipts" means premiums plus gross investment income. It also would increase the income election limit under another section of the IRS Code provision from $1.2 million to $1.971 million, and index it annually for inflation.
Introduction of the measure was sought by the National Association of Mutual Insurance Companies after one of the provisions governing small p-c companies was changed last year to close a loophole exploited by investment companies that created small insurers as a tax shelter.
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