Bill > HR1481

This bill establishes a new tax framework for Catastrophic Risk Transfer Companies (CRTCs), which are special-purpose insurers designed to handle high-impact, low-probability insurance risks. The bill defines a CRTC as a domestic corporation created under state law, primarily focused on catastrophic risk transfer through issuing securities, owning qualified investments, and entering into insurance or reinsurance agreements. To qualify, a company must derive at least 90% of its gross income from investment income and premiums from specific sources, and fully collateralize its insurance coverage. The bill outlines detailed tax provisions for these companies, including requirements for dividend distributions, specific deductions, and taxation methods. Catastrophic risks are defined as potential losses exceeding $25 million with a low likelihood of occurrence. The legislation also provides tax exemptions for qualified investment income dividends for non-resident aliens and foreign corporations, and sets guidelines for state-level taxation of reinsurance premiums to prevent double taxation. Additionally, the bill creates a mechanism for CRTCs to maintain compliance with tax regulations through specific reporting and distribution requirements, ensuring transparency and proper financial management of these specialized insurance entities.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/1481/all-info