Economic impact of tax on offshore affiliate reinsurance

Members of The Brattle Group issued an economic study sponsored by a coalition of foreign insurance/reinsurance companies that analyzed the economic impact of imposing higher taxes on reinsurance ceded by U.S. insurers to their foreign parents. The study concluded that U.S. consumers would have to pay an additional $10 to $12 billion per year in insurance premiums (or 20 percent) to maintain their current coverage if Congress passes the proposed legislation. The impact would be felt more severely in several catastrophe-prone states and lines of insurance.