A guidance to be issued by the Internal Revenue Service next week will require payment of an excise tax on property-casualty insurance premiums every time the money is ceded to foreign insurers and reinsurers.
However, to ease compliance, the agency said it will give carriers that haven't complied with the law until Oct. 1 to voluntarily file.
Of greatest concern is that the new guidance will impose a 1 percent excise tax on subsequent cedings, on top of the original 4 percent tax, creating a "cascading" effect, according to industry lawyers and lobbyists.
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