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Bill Would Allow Companies to Set Aside Disaster Funds Tax-Free in D.C.

The District of Columbia would become a domestic tax haven for insurers if newly proposed federal legislation became law. The bill would designate the capital...
October 18, 2011

The District of Columbia would become a domestic tax haven for insurers if newly proposed federal legislation became law. The bill would designate the capital as a special jurisdiction where reserves and related investments from insurers and reinsurers to cope with natural catastrophes could be set aside free of federal taxes. The bill targets a piece of reserves now held offshore in domiciles such as Bermuda. Lawrence Mirel, a former commissioner of the district's Department of Insurance, Securities and Banking who worked on the District of Columbia National Disaster Insurance Protection Act (H.R. 3139), said it requires companies with reserves held in the district to maintain a physical office. The district government could also impose an excise fee - as non-U.S. jurisdictions do.