Provisions in the massive legislative packages passed before Congress adjourned for the year today represent significant policy victories for property/casualty insurers, the National Association of Mutual Insurance Companies said.
“In clearing its slate today, Congress addressed some key areas of concern for property/casualty insurers,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “We’ve been working to advance many of these provisions for months, and even years, so passage today represents a big win for NAMIC members and the industry as a whole.”
Among the major provisions hailed by NAMIC were those enacting the Cyber Information Sharing Act and the Policyholder Protection Act.
Under the Cyber Information Sharing Act language in the omnibus spending bill, companies will be protected from liability in sharing information regarding actual or attempted data breaches and thefts with federal law enforcement or national security agencies.
“As crime and even warfare increasingly move to the digital realm, communication is vital to preventing cyber-attacks and limiting the damage hackers can inflict,” Grande said. “CISA will create a system where companies can safely report attacks, while respecting individual consumer privacy, which will help improve our national security and the ability for companies to defend themselves.”
The Policyholder Protection Act would amend the Federal Deposit Insurance Act to protect insurance company funds from being taken by banking regulators to shore up an affiliated failing bank by requiring the consent of the relevant state insurance regulator. “Insurance companies, and especially mutual insurers, maintain strong reserve funds to ensure that even under disastrous circumstances every claim can be paid,” Grande said. “Allowing for banking regulators to use them as a source of bailout funding could undermine that strength and likely would only make the situation worse for the overall company."
NAMIC achieved a longtime policy objective in the bill through a provision that would raise a tax election threshold for small insurers. Also contained in the tax package are provisions impacting international companies that would make the active financing exception permanent, under which active insurance income will not be included in the definition of subpart F income. There is also a five-year extension of the Controlled Foreign Corporation look-thru rule that allows companies to redeploy active foreign income without it being subject to tax under subpart F, and the so-called “Cadillac Tax” on high-value health plans was delayed for two years beyond its currently scheduled start in 2018.
“The legislative process can be frustrating at times, but the agreements reached by leadership and the votes today show that progress is still possible,” Grande said.
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