Mississippi Commissioner On Re/insurers Role
An “unintended consequence” of the American ‘Build Back Better’ tax proposal could be driving insurance prices higher, the Mississippi Insurance Commissioner Mike Chaney said, with Mr Chaney citing the role Bermuda re/insurers play.
Writing an op-ed for the Mississippi media, Mr Chaney said, “When I see legislation before Congress that would needlessly raise the property insurance premiums of everyone in the state – and indeed everyone in the United States – I feel obliged to speak up because Mississippians could face over $100 million dollars in increased insurance cost.
“My concerns center on the partisan “Build Back Better” Tax proposals. On the face of it, the bill has nothing to do with insurance,” he said. “However, an unintended consequence is that, if passed as written, it would drive insurance prices higher, causing consumers at all income levels to suffer financially.
“A report by the non-partisan R Street Institute found that this “hurricane tax” could add as much as $240 annually to the average Mississippi family’s property insurance premiums.
“American insurers rely heavily on reinsurance, effectively insurance coverage for insurers, most of which is purchased from the international reinsurance market.
“For example, Bermuda re/insurers paid a total of $22 billion to rebuild the US Gulf and Florida Coasts from seven hurricanes of 2004-2005, including nearly 30% of insured losses from Hurricanes Katrina, Rita and Wilma.
“The Bermuda market has paid more than $209 billion to US policyholders and insurance companies during the five-year period from 2016 to 2020.
“A reinsurer in Bermuda forced to pay more in taxes would respond by raising prices to target the same return they had before the new tax took effect,” Mr Chaney added.
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