A.M.BestTV: Captive Proponents Push to Clarify Premium Tax Issue

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FOR IMMEDIATE RELEASE

OLDWICK - JUNE 29, 2015 11:34 AM (EDT)
This ^A.M.BestTV episode examines legislation recently reintroduced by Sens. Lindsey Graham, R-S.C. and Patrick Leahy, I-Vt. that proposes to amend the Nonadmitted and Reinsurance Reform Act of 2010, which determines how surplus lines taxes are paid by nonadmitted insurers. Click on http://www.ambest.com/v.asp?v=nrra615 to view the video program.

The proposed legislation would clarify whether independent procurement taxes on insurance purchased from a captive must be paid to the insurer's home state and to the captive's domicile.

"The original legislation was not meant to include captives because captives are different," said Karen Weldin Stewart, insurance commissioner at the Delaware Department of Insurance. "Captives were not meant to be in the same category as surplus lines, since surplus lines are taxed in their home state. If this legislation passes it would mean a lot for domiciles because it would clarify where domiciles are going to be taxed at and what their taxes would be; consequently, allowing the domiciles to know that they won't be double taxed."

Also in the episode, A.M. Best Group Vice President John Andre discusses the possible impact the proposed legislation could have on captives and A.M. Best's ratings of them.

"A.M. Best rates a number of captives in various domiciles throughout the United States," said Andre. "Additionally, A.M. Best monitors how tax considerations affect rated captives, since these could possibly have a negative impact on the captives, in general, and may certainly influence some of A.M. Best's captive ratings."

Other people who appear in this episode include:

• Rick Roberts, president at RIMS, The Risk Management Society.

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^A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View ^A.M.BestTV episodes at http://www.ambest.tv .

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