Senator Christopher Bond, R-Mo., introduced S. 2084 last week, a bill to amend the Internal Revenue Code of 1986 to clarify the tax exemption for small property and casualty insurance companies.
Monte Ward, Federal Affairs Vice-President of the National Association of Mutual Insurance Companies (NAMIC), issued the following statement following the introduction of S. 2084:
“We at NAMIC are very pleased that Senator Bond has introduced this bill to complement what was earlier introduced in the House [H.R. 1908]. S. 2084 is an important piece of legislation that will go a long way in helping many of the small property and casualty insurance companies throughout the country.”
S. 2084, which has been referred to the Senate Finance Committee, would serve to increase the tax-exempt level for insurance companies from $350,000 to $551,000 and increase the income election level from $1.2 million to $1.89 million. S. 2084 would also index the levels to a cost-of-living adjustment.
Under current law, an insurance company with up to $350,000 in direct or net written premium, whichever is greater, is tax-exempt. Additionally, insurance companies with direct or net written premiums, whichever is greater, exceeding $350,000 but not exceeding $1,200,000, may elect to be taxed on their net investment income. The tax-exempt and investment income election level amounts have not been adjusted for inflation since 1986.
S. 2084 is nearly identical to H.R. 1908, which was previously introduced by Rep. Jim Nussle, R-Iowa, last year and was referred to the House Ways and Means Committee. H.R. 1908 currently has 10 House cosponsors.
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