IS A SToRM of A
dIffEREnT kInd
BREWIng?
The US is in desperate need of funding. Roger Crombie
looks at whether Bermuda will be among the victims as
the US looks for ways to balance the books.
By an odd coincidence, Bermuda was facing up to three ‘Bills’ in mid-August. In each case, the outcome
was uncertain: anywhere from a glancing blow to total devastation was a possible outcome.
The most obvious, of course, was Hurricane Bill, which looked, in the early going, as if it might land
right on the City of Hamilton. The second was a Congressional Bill, H.R. 3424, introduced late in July by
Representative Richard Neal, Democrat of Massachusetts, an unabashed example of protective legislation
taking aim at many of the tax incentives that initially helped make Bermuda an economic success
in international re/insurance. A similar Senate version of the Bill, sponsored by Finance Committee
chairman Max Baucus, Democrat of Montana, was announced earlier this year, but has yet to be
formally introduced.
We now know what happened with Hurricane Bill, but a clear reading of the chances of the Neal
Bill—predecessor legislation had been co-sponsored by then-Senator Barack Obama—and the Baucus
Bill remain uncertain. Each formally seeks to limit tax deductions for property and casualty insurers
that use foreign affiliates to reinsure US business.
Bermuda Re/insurance . September 2009 9
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