American businesses and consumers rely on the availability of insurance services provided at competitive rates. The Coalition for Competitive Insurance Rates is made up of business organizations, consumer advocacy groups, insurers and their associations advocating for continued and increased competition within the insurance industry.



A proposal in President Barack Obama’s FY 2017 budget seeks to deny a tax deduction for reinsurance premiums paid to foreign affiliates by domestic insurers. The proposal closely resembles legislation introduced in Congresses by US Representatives Richard Neal (D-MA) and Bill Pascrell (D-NJ) and Senator Robert Menendez (D-NJ) that would drastically raise insurance rates across the country. The President’s budget proposal and the Neal-Pascrell-Menendez legislation would impose an unnecessary and costly tariff on the companies that help spread insurance risks globally. This ability to spread risk has been especially beneficial for consumers and businesses in areas subject to hurricanes, earthquakes, crop failures and other forms of disaster.

More than 100 independent experts, state government officials, business owners, and associations have publicly filed opposition letters to these tax proposals. Additionally, two economic research firms, the Tax Foundation and the Brattle Group, have published independent studies pointing out the potential economic consequences of the proposals.




Arthur Laffer: Let’s Get The Economy Moving Again With Uniform And Understandable Tax Cuts

When the American economy is stuck in a rut, how do we get it moving again?

We know the route to recovery: Cutting tax rates, closing loopholes, and broadening the base to encourage working and saving, building businesses and creating jobs.

I’ve seen such strategy work before, and I know we can do it again. In 1980, I served as an economic adviser to presidential candidate Ronald Reagan. With the unemployment rate above 7 percent and inflation rates well into double-digits, Reagan proposed tax rate cuts to boost the incentives for production, output and employment.

The results: A landslide for Reagan who had been dismissed by Democratic Party stalwart Clark Clifford as an “amiable dunce.” After Reagan’s economic reforms took effect, economic growth soared.

Growth was so great that Reagan’s economic policies won bipartisan support. After the initial cuts in 1981, his tax reforms received support from many leading Democrats, including Sen. Bill Bradley of New Jersey and Rep. Richard Gephardt of Missouri.

Even before President Reagan, we saw tax rate cuts prove their prowess. Just as Reagan ignited the economic boom of the 1980s, President Kennedy’s tax rate cuts produced the economic growth of the 1960s that was so robust we refer to the era as the “Go-Go 60s.”

Fast-forward to today. The economy is mired in the slowest recovery since the Great Depression. Our tax policy, that has proved to be so tragic, reserves special favors for special interests and targets punitive taxes at their competitors.

Revving the economy up once again to the booms of the 60s and 80s requires smart policies, not narrow partisanship.

As Americans debate tax issues, the stakes couldn’t be higher, and the choices couldn’t be clearer. After cutting the corporate tax rate from 46 percent to 34 percent in 1986, the United States had about the lowest corporate income tax rate in the Organization for Economic Cooperation and Development (OECD). In fact, our success with the corporate tax rate cut inspired our competitors to cut their corporate tax rates, too. Eventually, the average corporate tax rate in the OECD was lowered far below the rate in the U.S.

However, today, contrary to where we started 30 years ago, the U.S. has the highest corporate tax rate in the OECD. But, because companies — just like people — go to great lengths to reduce their tax burdens, the U.S. also has some of the lowest corporate tax revenue collected as a share of gross domestic product of any OECD country. That is why it is so important for the U.S. to have one of the world’s lowest corporate tax rates again, so that companies will focus on creating products and providing services rather than specializing in gaming global tax codes. 

As America cuts corporate taxes, we also need to avoid special interest provisions that reward some sectors and punish others, often under the guise of supporting American companies against their competitors.

Here’s a prime example of the protectionism that distorts the tax code and derails economic growth:

As in previous years, President Obama is supporting a proposal by Sen. Robert Menendez (D-NJ) and Rep. Richard Neal (D-MA) to defer or deny U.S.-based, foreign-owned insurance companies the standard business cost deduction for a basic expense.

Insurance companies buy backup coverage — or “reinsurance” — to spread the risk for potential major losses, such as earthquakes, hurricanes or airplane crashes. By US insurers purchasing this reinsurance from foreign affiliates, insurance companies can pool the risk of hurricanes in Florida and earthquakes in California with natural disaster risk from Europe and Asia. They diversify their portfolio while matching risk with their capital.

Revealing its protectionist purposes, the Menendez-Neal proposal would deny or defer the deduction for buying reinsurance from overseas affiliates to foreign-owned, but not US-owned, companies. This is a textbook case of bad tax policy: Creating a high tax rate on a narrow tax base, instead of a low rate on a broad base. It would also leave American insurance companies vulnerable to protectionist retaliation in other countries.

Worse yet, this punitive measure ignores the basic economic principle that, when government imposes a punitive tax on a product, consumers get less of it and pay more for it. In a study of a previous version of the proposed legislation, the economic consulting firm Brattle Group estimated that the supply of primary insurance in the U.S. would decline by between $11.2 billion and $11.7 billion as a result of this special surcharge. Meanwhile, American businesses and individuals would have to pay between $11 billion and $13 billion more for insurance coverage.

Because insurance is so essential to the economy, the nation would lose an estimated $4.07 in gross domestic product for every $1 that the federal government would gain in additional tax revenues from this proposal, according to an expert Tax Foundation analysis.

This trend from the Menendez-Neal proposal follows the detrimental trend of other protectionist economic policies, creating an environment that discourages foreign direct investment, competition and hinders economic growth.

In a free-market economy, taxes should fund the government without being so complex that they pick winners and losers, so steep that they discourage work and investment or so uncompetitive that they compel companies to move their tax domiciles overseas.

Instead of punitive taxes on politically targeted companies, America needs uniform, unbiased and understandable principles for defining the corporate tax base. Moreover, we need to make the tax code internationally competitive, with lower marginal tax rates. Now, as in the past, that is the proven way to build businesses, generate jobs and increase incomes.

We know the roadmap. Now, let’s get America moving again.


FY 2017 Budget Provision to Tax Foreign Insurers Opposed by Bipartisan Coalition 

President’s budget would reduce competition and consumer access to affordable insurance

Washington, DC (February 9, 2016) -- The Coalition for Competitive Insurance Rates (CCIR), the leading voice for continued and increased competition within the insurance industry, today condemned an inequitable provision in President Obama’s FY 2017 budget that would deny a routine business tax deduction for certain reinsurance premiums paid to foreign-based affiliates by domestic insurers. This is the seventh attempt by the president to introduce this specific budget recommendation, despite fervent opposition to the proposal in previous sessions.

“These reinsurance tax schemes are writ large attempts at special interest protectionism,” said top economist Arthur Laffer, who in 2015 published a study, "Do We Want Special Interest Trade Protectionism in the Tax Code?," that warns that what amounts to a reinsurance tariff would result in a capital reduction of nearly $10 billion, as well as a further drop in GDP due to foreign trade retaliation. “Denying this standard business expense deduction will push firms out of the marketplace, reducing coverage and increasing costs for consumers.”

President Obama’s budget measure, which closely resembles legislation (H.R. 2054 and S. 991) proposed in the 113th Congress by Reps. Richard Neal (D-MA) and Bill Pascrell (D-NJ) and Sen. Robert Menendez (D-NJ), would result in a tax increase  on reinsurance companies responsible for maintaining affordable business and consumer access to insurance by spreading risks globally. This proposal has remained under active consideration in Congress, having been included in former Ways and Means Committee Chairman Dave Camp’s (R-MI) tax reform legislation (H.R. 1) in 2014; but it was not proposed by the Senate Finance Committee’s International Tax Reform Working Group in 2015.

In a letter sent today from CCIR to the chairmen and ranking members of the US Senate Finance and House Ways and Means Committees, 31 concerned insurers, business, industry and consumer groups expressed anxiety over the unintended probable consequences of such proposals.

“A tax on foreign affiliate reinsurance will stifle the reinsurance industry and drastically reduce competition in the marketplace,” said Tom Feeney, president and CEO of Associated Industries of Florida, a signatory of the CCIR letter. “Limiting U.S. domestic insurance capacity will drive up costs, placing a huge burden on homeowners and businesses. This tax would benefit few at the expense of many, including home owners, insurance companies and small business owners.”

A growing chorus of state and federal officials from across the political spectrum has vocally opposed the reinsurance tax proposals. Current and former state insurance commissioners representing Florida, Georgia, Louisiana, Mississippi, Nevada, North Carolina, Pennsylvania and South Carolina have publicly criticized the measures, as have agriculture commissioners from Florida, North Carolina and Tennessee, and Florida Governor Rick Scott.

A 2015 report issued by the Tax Foundation on the consequences of a tax on the foreign reinsurance industry found that United States’ GDP would experience $1.35 billion in losses over the long term, which is approximately twice the revenue it would collect. In an economic impact study of previously introduced related legislation by Rep. Neal and Sen. Menendez, the Brattle Group, a leading economic consulting firm, found such legislation would have reduced the net supply of reinsurance in the US by 20 percent, forcing American consumers to have paid a total of $11 to $13 billion a year more for their same coverage.

As the Laffer study concludes, “Good tax reform promotes a tax code with the lowest possible tax rate on the broadest possible tax base. Instead, the Obama/Menendez/Neal proposal to eliminate the deduction for foreign reinsurance premiums follows the exact opposite path, applying a high tax rate to a very narrow tax base – a targeted and specific industry. The known result—surely accompanied by a number of unanticipated consequences as well—will be that domestic insurers use less foreign affiliate reinsurance, which will result in less tax revenue than expected and more expensive, less effective insurance.”


The Coalition for Competitive Insurance Rates is made up of business organizations, consumer advocacy groups, insurers and their associations. For more information on CCIR, please visit

Media Contact:  
Emily Flynn Pappas  
Podesta Group  



Senate Working Group Unveils Int'l Tax Report; Bipartisan Coalition Calls Failure to Dismiss Protectionist Measure Disappointing

The Senate Finance Committee's International Tax Reform Working Group, led by committee co-chairs Sen. Rob Portman (R-OH) and Sen. Charles Schumer (D-NY), this week published a final report concluding that the committee will “consider both sides’ arguments moving forward” in its treatment of foreign affiliate insurance. The Coalition for Competitive Insurance Rates (CCIR), a bipartisan insurance consumer coalition, responded with disappointed over the committee’s failure to dismiss existing protectionist measures as it relates to foreign reinsurers, but expressed cautious optimism that the possibility still exists for a more affirmative stance to be taken.

Click to read more ...


Top Economic, Industry Experts Agree: Protecting Consumers from Punitive Reinsurance Tax Makes Sense

Leading economists and industry experts convened on Capitol Hill Thursday for a panel discussion on corporate tax reform, specifically as it relates to how Congress should approach international affiliate reinsurance purchases.

Click to read more ...


Op-Ed: Pro-growth tax reform, yes; discriminatory taxes, never

Famed economist Dr. Arthur Laffer this week penned an op-ed in The Hill advocating for pro-growth tax reform, particularly as it relates to protecting reinsurers from costly trade protections that would decrease availability and levy additional costs onto consumers.

Click to read more ...