Bill > S1987

This bill amends the Internal Revenue Code to provide special tax rules for financial guaranty insurance companies (FGICs) when determining their status as passive foreign investment companies (PFICs). Specifically, the bill allows FGICs to include unearned premium reserves in their applicable insurance liabilities under certain conditions, such as being prohibited from reporting loss reserves except when expected losses exceed unearned premiums, having a financial guaranty exposure of at least 15-to-1 or a state/local bond exposure of at least 9-to-1, and adhering to specific single risk limits. The bill defines a financial guaranty insurance company as an insurance firm exclusively writing or reinsuring financial guaranty insurance, and provides detailed calculations for financial guaranty and state/local bond exposures. Additionally, the bill requires U.S. persons owning interests in certain non-publicly traded foreign corporations to report specific information to the IRS and creates a grace period for qualified financial guarantee insurance companies to avoid being classified as PFICs for taxable years beginning after December 31, 2024. This legislation aims to provide clearer tax treatment and reporting requirements for these specialized insurance companies.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/1987/all-info