Posts Tagged ‘Neal Bill’

January 13th, 2011

Industry Issues and Trends: Regulatory Activity Remains a Central Focus, Part II: United States and Europe

Posted at 1:00 AM ET

141x141jan1thumb6US: The Legacy of the Financial Crisis

While Solvency II remains very much on the radar of US insurance and reinsurance companies, another important regulatory initiative - the Neal Bill - may encounter hurdles following the recent political shifts in Washington. This legislation seeks to discourage companies from ceding ‘excessive’ portions of their US premiums to offshore affiliates to lower their tax burden. A revised version of the bill was also incorporated into the Obama Administration’s 2010 budget plan. However, prospects for the full bill’s passage diminished in the 2010 US midterm elections, when the Republican Party took control of the House of Representatives and eroded the Democratic majority in the Senate. As demonstrated by the recent extension of the Bush tax cuts, the Obama Administration has been compelled to compromise on its legislative agenda, and the shift in power could prevent the Neal Bill from passing into law.

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