Two insurance groups responded to a letter sent to state insurance commissioners by the Center for Economic Justice (CEJ) and the Consumer Federation of America (CFA) which said the tax reform plan would be a windfall for insurers.
“The CEJ/CFA letter misleadingly over-simplifies and overstates the impact of federal tax changes in a number of ways. Specifically, the letter refers to the impact on insurance companies as ‘massive’ and a ‘windfall.’ In truth, the impact of lower federal taxes will vary greatly for each insurer, in each state, and for each line of business. Therefore, we respectfully ask you to consider the following facts before responding to the CEJ/CFA letter,” wrote the American Insurance Association (AIA) and the Property Casualty Insurers Association of America (PCI) in a letter to state insurance commissioners.
The two groups said the property and casualty insurance industry’s track record of price competitiveness means that any bottom-line benefits of Tax Cuts and Jobs Act will be felt by consumers.
“However, the impact of the new tax law will differ significantly from insurer to insurer, from line of business to line of business and from state to state. Therefore, AIA and PCI are urging state insurance regulators to carefully consider the complexity of the tax law and the different impact across products and lines of business,” they added.