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.

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Florida TaxWatch Study Finds Severe Risks to Access to Insurance and Reinsurance in House GOP Tax Plan 

 Border-adjusted tax would have serious negative economic impact on Floridians 

Washington, DC (March 20, 2017) – The Coalition for Competitive Insurance Rates (CCIR), the leading voice for continued and increased competition within the insurance industry, today commended a study conducted by Florida TaxWatch, an independent and nonprofit taxpayer research institute, that found a 20 percent border-adjusted tax proposed in the House GOP’s Tax Reform Tax Force, if enacted, would reduce Florida’s supply of insurance and reinsurance, costing each consumer, homeowner and business policyholder up to an extra $910 per year.

The study, Analysis of a Border-Adjusted Tax on Florida’s Property Insurance Market, found that in Florida, the tax would increase the cost of commercial and residential property insurance by $1.4 – $2.6 billion annually. Homeowners would face a 7.9 – 12.9 percent increase in the cost of premiums annually, and reinsurance rates at large would see a steep increase of 14 – 31 percent. Industry experts and economists believe that the harmful effects of a border-adjusted tax on the property insurance market would not be restricted to Florida; coastal states and others likely to be affected by weather-related risk events would suffer greatly as well. 

“This study’s findings are clear.  A border-adjusted tax on insurance and reinsurance would be awful for Floridians, decreasing economic activity, employment and earnings,” said Tom Feeney, president and CEO of Associated Industries of Florida. “That should worry Floridians greatly as well as raise eyebrows across the country.  Other coastal states would be wise to examine the potential impact of this proposal on their consumers and businesses.”

The analysis found that the border-adjusted tax on insurance and reinsurance would indeed have direct and drastic effects on Florida’s economy. The proposal would:

  •  Cut approximately 42,800 – 77,400 jobs;
  •  Slash worker earnings by $1.4 billion - $2.6 billion;
  •  Reduce economic activity in Florida by $2.8 billion - $5.0 billion; and
  •  Inflict long-term damage on Florida’s economy by increasing the cost of living and doing business, resulting in a loss of competitiveness.

“It’s important for Florida lawmakers to recognize the dire impact that this proposal would have on everyone – not just on businesses, consumers and homeowners,” said Feeney. “As Florida TaxWatch’s study illustrates, decreasing the supply of insurance raises consumer premiums and deductibles. It would effectively be a tax on Florida’s economic foundations – businesses, consumers, families and homeowners. And the effects of this proposal will ripple through Florida’s economy, leaving Florida worse off.”

The Florida TaxWatch analysis comes on the heels of a report released by The Brattle Group in January which examined the effects of a border-adjusted tax on the insurance and reinsurance industry on a national scale. According to the report, a border adjustment tax would result in a total loss ranging from $15.6 billion to $69.3 billion, which in turn would raise costs for consumers from $8.4 billion to $37.4 billion. It also cautioned that the impact of border-adjusted tax would be particularly severe in coastal states such as Florida, which host insurance companies struggling to diversify their exposure to risk.

Florida’s thriving property insurance market relies heavily on foreign based companies that sell reinsurance. Ninety one percent of reinsurance for Florida’s homes is from international reinsurers and of the top 38 reinsurers serving Florida’s homeowners, 32 are foreign-based. Recognizing the economic disadvantage that would result from this proposal and similar legislation, a growing chorus of state officials from across the political spectrum has spoken out against reinsurance tax proposals. Current and former state insurance commissioners, senators, representatives, trade associations, consumer groups and other elected officials have publicly criticized the measures, as has Governor Rick Scott.

“Floridians should be wary of any attempt to constrict the supply of insurance and reinsurance,” said Feeney. “Doing so will increase costs for consumers, homeowners and businesses across the board, and that will lead to an inefficient marketplace. It’s crucial that insurance is affordable for Florida’s businesses and residents.”

As an independent, nonpartisan, nonprofit taxpayer research institute, Florida TaxWatch serves as a government watchdog to improve the productivity and accountability of Florida government. The study’s lead author, Katherine Hayden, serves as a consulting economist for Florida TaxWatch, and has extensive economic analysis and consulting experience. The study’s other authors, Bob Nave, Kyle Baltuch and Chris Barry hold expertise in the intersection of government and economic policy. Further information on the study and its authors may be accessed at


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

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Emily Flynn Pappas

Podesta Group