Legislation introduced by U.S. Sens. Thom Tillis (R-NC) and Raphael Warnock (D-GA) would modernize the taxation of debt investments held by life insurers, officials said.
The legislation, the Secure Family Futures Act, would repeal the current capital tax treatment of those investments, like bonds, and apply ordinary tax treatment to them, the lawmakers’ offices said.
“This commonsense legislation ensures debt investments made by insurance companies are treated equally under our tax code,” Tillis said. “By making these critical changes, insurance companies will be able to promote economic growth and investment in communities in North Carolina and across our country.”
The legislation amends IRS code to “exclude debt held by certain insurance companies from capital assets and to extend capital loss carryovers for such companies from 5 years to 10 years.”
“Life insurance provides peace of mind, and we should make that peace of mind more accessible and affordable, especially when there’s a commonsense fix in our tax code,” Warnock said. “That’s why the bipartisan Secure Family Futures Act is so important, and I’m proud to partner with Senator Tillis on this bill.”
The bill was supported by insurers and insurance groups like the American Council of Life Insurers (ACLI).
“Life insurers protect families and help power the American economy,” David Chavern, president & CEO of ACLI, said. “The $8 trillion they invest in businesses, infrastructure, and job creation adds life to communities across the United States. And the returns from these investments help families and businesses access the financial protection they need to succeed and thrive. Senator Tillis’s and Senator Warnock’s bill offers much needed changes to the tax treatment of life insurers’ bond investments that will foster further economic growth and help more people and businesses secure their financial futures.”