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June 10, 2010 Thursday 04:17 PM EST
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Reinsurers Try to Drum Up Opposition to Tax Bill With YouTube Video
Jesse A Hamilton
WASHINGTON
International reinsurers are trying a new approach to lobbying against a proposal that would mean higher tax bills for companies passing insurance to offshore reinsurers in places where taxes are cheaper. The Coalition for Competitive Insurance Rates has posted a YouTube video explaining the value of reinsurance in daily life and how cranking up foreign reinsurers’ tax burden might hurt consumers. The video, called “The New Insurance Tax,” is visually similar to recent UPS television ads in which a man diagrams his point on a white board. In this case, the unseen narrator is explaining the basics of reinsurance. “Like their customers, insurance companies have to buy insurance to manage their risk,” it explains. “By spreading the risk around the world, insurance companies don’t become overexposed and can provide consumers with more insurance at lower prices — all thanks to reinsurers. But a bill in Congress is threatening to change this.”The specific target of the video, which was produced by Swiss Re for the coalition, is HR 3424, a bill introduced repeatedly by Rep. Richard Neal, D-Mass., which would eliminate certain tax deductions for excess non-taxed reinsurance premiums. The bill aims at reinsurers who ship premiums to offshore affiliates, but the companies aren’t concerned the bill will pass on its own. What they are hoping to avoid is its use as a revenue component in some other bill as this congressional session winds to a close. “The need for revenue is increasing,” said Alex Kaplan, a vice president for regulatory affairs at Swiss Re. “To stay ahead of the curve a little bit, we thought it was important to get a message out there more broadly.” The online video — the first YouTube effort for Swiss Re — claims the taxes would cut availability and raise the cost of insurance, costing consumers $10 to $12 billion a year, it said. It also mentioned that foreign reinsurers paid the majority of claims in New York after Sept. 11 and for such storms as Hurricane Katrina. “Foreign reinsurers are essential after catastrophic events.”“It’s targeted very much at congressional staff,” Kaplan said, and the reason for its simplicity “is because they’re busy and have very little time.” It will also be distributed through association memberships and think tanks, he said. This lobbying approach “isn’t the only avenue we’re pursuing,” said Kaplan, who sees the video as a successful way of getting the basics across. Such a video is a first for Swiss Re and unusual in the industry. “Social media is relatively new to the wholesale business,” Kaplan said. The launch of the short, visual pitch finds itself among the latest YouTube fare, such as “How to Get Rid of a Tattoo.” But the reinsurance video has had its comments area disabled, so viewers won’t be able to share their thoughts.Swiss Re America Group has a current Best’s Financial Strength Rating of A (Excellent).(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)
June 11, 2010
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