NAIC Ready To Meet With Treasury On Taxes
By Jim Connolly
NU Online News Service, Dec. 6, 12:30 p.m. EST, New Orleans?The National Association of Insurance Commissioners has voted to pursue a dialogue with the Treasury Department on tax issues such as reserving levels.[@@]
A motion was carried during a joint executive/plenary session at the NAIC's winter meeting here this weekend.
Georgia Commissioner John Oxendine, who is heading up the NAIC's Tax Policy Task Force, said that discussions with the Treasury Department will start at the beginning of 2005.
Among the issues Mr. Oxendine said will be discussed are general reserving as well as health insurance reserving and catastrophe property-casualty reserves.
Statutory reserving and reserving for tax purposes can differ, he explained. State insurance regulators want to reserve conservatively and the Internal Revenue Service can view these requirements as overreserving, he added.
Reaching an understanding with IRS is a goal for any meetings, Mr. Oxendine said. He pointed out that the IRS gets the same amount of tax money but that it is more a matter of when they receive it?now or at a deferred later date.
The meetings will cover the life, health and property-casualty components of the industry, Mr. Oxendine told insurance commissioners during the executive/plenary session.
Mr. Oxendine noted that it is important to get on the same page with Treasury, although he said that "there is a lot of concern that any time you go to Capitol Hill you can open up a can of worms."
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