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Norton to Speak at Congressional Briefing to Discuss her Catastrophe Insurance Reserves Legislation on Friday

March 22, 2012

WASHINGTON, D.C. – Congresswoman Eleanor Holmes Norton (D-DC), ranking member of the House Subcommittee on Economic Development, Public Buildings, and Emergency Management, will speak at a Heartland Institute congressional briefing, entitled "Dealing with Catastrophes: Could Onshore Reserving Make a Difference?" on Friday, March 23, at noon in 122 Cannon, about her legislation to make the District of Columbia an international financial center for catastrophe insurance reserves that insurers must set aside to cover losses from natural disasters. Along with Norton, Congressman David Rivera (R-FL), Lawrence Mirel, former Commissioner of Insurance, Securities and Banking for the District of Columbia, Matt Wulf, vice president for state relations at the Reinsurance Association of America, and Eli Lehrer, vice president of the Heartland Institute, will be on the panel to discuss how insurers maintain "catastrophe reserves."

"Locating reserves in the U.S. would fuel both the local and U.S. economies, would provide the protection of U.S. laws for individuals and businesses with property and casualty insurance, and would protect U.S. taxpayers, who would otherwise likely have to pick up the tab if there were insufficient reserves to pay for natural disaster-related issues," Norton said.

Norton's District of Columbia National Disaster Insurance Protection Act would amend federal tax law to make the District a special tax jurisdiction where catastrophe insurance reserves and the investment income from these reserves would be exempt from federal income taxes. Because these reserve funds are subject to federal income taxes, property and casualty insurers now hold billions of dollars of these reserves offshore, such as in Bermuda and the Cayman Islands, where they are not subject to taxes.

The Norton bill would help spur economic development in the District and the region because: (1) companies keeping their reserves in the District would be required to have a physical office here and employ a certain number of District residents, as they do in foreign jurisdictions, leading to increased income, sales and property tax revenue; (2) lawyers, accountants, actuaries, bankers, insurance consultants, and support personnel would be needed to serve these new insurance companies; (3) the District could charge a modest excise tax on the catastrophe reserves; and (4) the District would derive increased tax revenue from the banks holding the funds.

Published: March 22, 2013