The National Association of Mutual Insurance Companies welcomed passage today of HR 1, the Tax Cuts and Jobs Act.
“NAMIC applauds passage of HR 1, the Tax Cuts and Jobs Act, as the first significant tax reform in a generation,” said Jimi Grande, senior vice president of government affairs for NAMIC. “We are very pleased to see that on the way to creating opportunities for economic growth by reducing the federal tax burden, Congress also recognized the unique nature and business model of the property/casualty insurance industry.”
For property/casualty insurers, the legislation would slash the tax rate 14 percentage points and eliminate the corporate alternative minimum tax, while maintaining the current effective rate for municipal bond interest, the deductibility of advertising expenses, and current law regarding carrybacks and carryforwards of net operating losses. Also, critical to NAMIC’s smallest member companies, the bill maintains the investment income election for small property/casualty insurers that helps ensure consumers in underserved rural areas continue to have coverage options.
“Given that property/casualty insurance industry’s average effective tax rate has been in the low 30s, a 21 percent corporate rate is a huge win for us,” Grande said. “Congress deserves high praise for its ability to balance the very real need to keep our corporate tax rate internationally competitive with the need to ensure that they did not create a fundamental mismatch between the federal tax code and our industry’s regulatory and accounting systems. We think they struck this balance nicely.”
With more than 1,400 member companies, NAMIC is the largest trade association serving property/casualty insurers, and the association advocated on behalf of its member companies and policyholders for many of the provisions ultimately included in the bill.
“Property/casualty insurance provides important protections, for policyholders and the broader economy, by absorbing losses and spreading risk,” Grande said. “The legislation passed today will allow mutual insurers to better serve their policyholders, both individuals and businesses, and continue to protect them from loss while fostering economic growth for the entire nation. NAMIC is grateful for Congress’ hard work on this historic legislation, and we look forward to seeing President Trump sign it into law.”