WASHINGTON–Legislation introduced in the House last week would increase the attachment point for investment income taxes on small property-casualty insurance companies.
The National Association of Mutual Insurance Companies said the legislation concerns Sec. 831(b) of the Internal Revenue Code. No bill number has as yet been assigned.
This provision allows small property-casualty insurers with direct or net written annual premiums not exceeding $1.2 million to be taxed on their net investment incomes.
But, according to NAMIC officials, the maximum level was last changed in 1986.
NAMIC has led the initiative to have the level increased to $1.971 million to reflect the last 22 years of inflation and to include an annual cost-of-living adjustment for future years, according to Marliss McManus, a senior public affairs director with NAMIC.
"Small mutual property-casualty insurance companies serve a very important niche market in America," Ms. McManus said. "With many small companies approaching the $1.2 million limit, both the companies and their customers will be adversely impacted if the level is not increased," she said.
The legislation was introduced by Rep. Earl Pomeroy, D-N.D., and Rep. Paul Ryan, R-Wis., as Congress prepared to recess until Sept. 8. The legislation is a companion to S. 2040, legislation introduced last year in the Senate by Sen. Christopher S. Bond, R-Mo., and Sen. Blanche Lincoln, D-Ark.
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