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Neal Bill: The case for


The Coalition for a Domestic Insurance Industry argues that the Neal Bill


will create a level playing field for US insurers and foreign-based insurers who do business in the US.


operating in the United States should be allowed to avoid most of its taxes simply because its offshore parent can shift money from one pocket to another. Unless Congress takes prompt action to alleviate this disparity, America’s primary insurance industry will be driven offshore—taking with it the billions of dollars in annual tax revenues that it now generates for the Treasury. As John Berger, chief executive officer of offshore insurer HarborPoint Limited (now Alterra Capital Holdings Limited) recently put it: “If you’re not in one of these [offshore] domiciles, shame on you. All things being equal, the tax advantage will win over time.”


T


oday, the US direct insurance business is facing a seismic crisis, as offshore companies are establishing vehicles to write direct insurance and avoid paying US taxes. No foreign-owned company


FAIRNESS TAX November 2010 | INTELLIGENT INSURER | 35


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