The Effects of a Border-Adjusted Tax on Florida's Property Insurance Market

The U.S. House of Representatives’ Tax Reform Task Force recently unveiled its “Blueprint” for comprehensive tax reform, including a proposal to make the federal corporate income tax “border adjustable.” The Blueprint does not discuss precisely how the border adjustments would work, so it is unclear whether or how such a mechanism would apply to reinsurance transactions; however, if the tax is applied to such transactions, then it would significantly affect the cost of reinsurance, and, ultimately, property and casualty insurance for consumers. Property insurers rely heavily on foreign reinsurance to diversify low-frequency-high-severity natural catastrophes, so states most vulnerable to catastrophic losses—such as Florida—would be most impacted by applying a border-adjusted tax to reinsurance.

To inform policymakers and taxpayers of the potential impact to Florida, this report analyzes the effects of applying a border-adjusted tax to reinsurance transactions, and estimates the impact of such a tax on Florida’s policyholders, the property insurance market, taxpayers, and the economy.

Documents to download

Print
3703 Rate this article:
No rating

x