Taxation of Catastrophic Risk Transfer Companies for Insurance Stability
This act establishes new tax rules for companies that manage catastrophic risks, like natural disasters. The goal is to ensure these companies have enough capital to cover large insurance losses. For citizens, this could mean a more stable insurance market when major disasters occur.
Key points
New tax framework for companies dealing with catastrophic risks to ensure financial stability.
Defines catastrophic risk as low-probability, high-impact events (losses over $25 million).
Companies must derive at least 90% of gross income from qualified investments and specific insurance premiums.
Exempts certain investment income dividends from withholding taxes for non-resident aliens and foreign corporations, potentially attracting more capital.
Prevents double taxation of reinsurance premiums by different states, streamlining operations for these companies.
Expired
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