Florida Gov. Rick Scott has voiced his opposition to legislation that would deny tax deductions for reinsurance premiums paid to foreign-based affiliates of domestic insurers.
He says that the legislation, which is included in President Obama’s current budget recommendations, may “have a disastrous impact on Florida’s families and businesses” by increasing insurance costs and shrinking insurance capacity.
In a letter to Congressman Vern Buchanan (R-FL), Scott wrote that bills H.R. 2054 and S. 991 would cause consumer insurance bills to rise by more than $817 million, for commercial multi-peril insurance to increase by 12.6 percent, or $264 million annually, and the price of homeowner’s multi=peril insurance to increase by 4.2 percent or $266 million a year.
International insurance companies are expected to cover nearly 50 percent of the $19 billion to $25 billion of losses caused by Hurricane Sandy, says advocacy Group Coalition for Competitive Insurance Rates (CCIR).
“Florida needs this global reinsurance capacity,” said Scott, “and the reinsurance tax included in the president’s proposal and the Neal-Pascrell-Menendez bill would damage our state’s economic recovery by increasing insurance costs for our policyholders.”