Washington–Legislation clarifying the scope of a tax exemptionfor small property-casualty insurance companies was introduced inboth the House and the Senate before Congress departed for itsannual summer recess.
The bills would modify existing law to say that "gross receipts"means premiums plus gross investment income. It also would increasethe income election limit under another section of the IRS Codeprovision from $1.2 million to $1.971 million, and index itannually for inflation.
Introduction of the measure was sought by the NationalAssociation of Mutual Insurance Companies after one of theprovisions governing small p-c companies was changed last year toclose a loophole exploited by investment companies that createdsmall insurers as a tax shelter.
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