Insight and Intelligence on the London & International Insurance Markets

25 February 2018

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US tax reform tests total return reinsurers

Ted Bunker 6 February 2018

Total return reinsurers have been caught off guard after proposed changes in the US tax regime threatened to redefine offshore affiliates as investment managers and not reinsurers.

The provision replaces the previous qualification based on a "predominance of activity" standard, with the stipulation that insurance liabilities must be at least 25 percent of total assets. Liabilities include losses, loss adjustment expenses and reserves.

However, unearned premiums are excluded from the liabilities of offshore reinsurers. That came as a surprise, one...

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This article was published as part of issue February 2018/1

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