According to a Brattle report released on July 8, 2010, the nation’s consumers would have to pay billions of dollars in higher insurance premiums if Congress passes H.R. 3424, legislation that imposes a higher tax on certain insurance companies.
“The Impact on the U.S. Insurance Market of H.R. 3424 on Offshore Affiliate Reinsurance: An Updated Economic Analysis” was sponsored by the Coalition for Competitive Insurance Rates (CCIR) and analyzes the economic impact of imposing higher taxes on foreign-owned insurance and reinsurance providers. The legislation was introduced by Rep. Richard Neal (D-MA) in July 2009. The study was authored by Dr. J. David Cummins, the Joseph E. Boettner Professor of Risk Management, Insurance and Financial Institutions at the Fox School of Business at Temple University and the Harry J. Loman Professor Emeritus of Insurance and Risk Management at the Wharton School at the University of Pennsylvania, and The Brattle Group’s Dr. Michael Cragg and Dr. Bin Zhou. The study found that H.R. 3424 would cost consumers an additional $11 to $13 billion per year to maintain their current insurance coverage. Additionally, the legislation would significantly weaken competition and reinsurance capacity in the United States by 20 percent.
The report and associated press release are available for download from the CCIR website or below.