NAMIC has been working hard to have legislation introduced this Congress that would expand the Internal Revenue Code Section 831(b) to reflect the inflationary impact since its enactment in 1986.
Since the Tax Reform Act of 1986, Section 831(b) of the Internal Revenue Code has allowed property/casualty insurance companies with direct or net written annual premiums not exceeding $1.2 million to elect to be taxed on their net investment income. This election level has not been adjusted to reflect that last 23 years of inflation. If it were indexed in order to account for inflationary changes since 1986, the investment income election would be $2,028,000.
NAMIC is pleased to report that Reps. Earl Pomeroy, D-N.D., and Paul Ryan, R-Wisc., introduced legislation yesterday that would increase the election threshold to $2.025 million and will be tied to an annual cost-of-living index for future years.
Policymakers have been overwhelmed over the last few months with the meltdown of the financial markets, the auto manufacturers, and healthcare reform. Therefore, any changes to the tax code will likely not take place until 2010. In the meantime, NAMIC will push to have companion legislation introduced in the Senate and continue to search for an appropriate vehicle to attach our legislation.