Two laws currently before Congress have found opposition from the Coalition for Competitive Insurance Rates, a group of businesses and consumers that rely on low rates stemming from competition in the national insurance market. The legislations in question are H.R. 3157 and S.B. 1693. Both laws impose greater taxes on foreign insurance and reinsurance companies that wish to do business within U.S. borders. The Coalition fears that this will dissuade foreign companies from entering the market, thereby reducing competition and raising insurance prices.
Currently, the majority of the reinsurance needed to protect U.S. consumers and businesses from events that rock the national insurance industry comes from foreign reinsurance companies. A report from the Brattle Group of Massachusetts, an economic consulting firm, found that the two proposed legislations could cost consumers an additional $11 billion a year as U.S. insurers raise rates to compensate for more expensive reinsurance coverage. While the report was last updated in 2010, researchers with the group say the findings are still accurate.
The Coalition is calling for changes to be made to the laws to make them more appealing to foreign companies. While not averse to the concept of higher taxes, the group says the laws, in their current form, could negatively impact the insurance markets of states like Florida, Texas and Louisiana who have more expensive insurance coverage due to their proximity to the sea.
