ACLI Now Supports Bush Plan To Eliminate Double Taxation Of Dividends
The life insurance industry is expressing broad support for President Bushs economic stimulus and growth package now that Treasury Secretary Jack Snow has said he believes any problems involving life insurance products can be resolved. (See NU, March 10.)
Frank Keating, president of the American Council of Life Insurers, Washington, along with some 47 chief executive officers of life insurance companies, last week sent a joint letter to Bush expressing support for the goal of eliminating the double taxation of dividends, treatment which they say should also apply to annuities.
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Keating told National Underwriter that executives of ACLI member companies joined him in a series of meetings with administration officials to discuss the importance of extending the tax-free treatment of dividends to annuities.
He says that because the life insurance industry is regulated at the state level, issues of great importance to the industry are often not understood in-depth by policymakers in Washington.
When Bush proposed his economic package aimed at encouraging savings, Keating says, life insurers were stunned to find that annuities would be disadvantaged.
ACLI, he says, began a series of meetings with technical staff at the Treasury Department and also met with Glenn Hubbard, who then was chairman of the Council of Economic Advisors.
The consistent message, according to Keating, was that an annuity is the one product that helps Americans save for retirement and guarantees a lifetime income. It should not be disadvantaged, he says.
Subsequently, Keating says, Arthur F. Ryan, chairman of Prudential Insurance Company, Newark, N.J., joined him in a meeting with Snow.
Snow then told a House Ways and Means Committee meeting an accommodation would be reached with the life insurance industry.
Keating says the letter supporting the presidents goals signed by the industry executives represents an appropriate statement now that the administration has embraced the view that life insurance products must be encouraged, not discouraged.
As of this writing, it was unclear when Congress would act on the economic stimulus package. The war with Iraq, Keating notes, is likely to dominate the news for now.
Another major issue that could be affected by the war is medical malpractice liability reform.
In the wake of the recent 229-196 vote in the House of Representatives approving H.R. 5, legislation that would place a $250,000 cap on noneconomic damages in medical liability cases, reform advocates are urging the Senate to act quickly to finalize the legislation.