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August 03, 2009 at 08:00 PM
WASHINGTON BUREAU — A new House bill, H.R. 3399, would let life insurers with non-life affiliates file consolidated income tax returns.
The bill was introduced by Reps. John Larson, D-Conn., and Patrick Tiberi, R-Ohio, before the House left last week for a one-month recess.
The current rules, in effect since the early 1990s, increase the tax bills for insurance company groups that file consolidated returns when at least one group member is a life insurer.
The rules affect the way the groups offset income and losses on consolidated returns.
Under one rule, a life insurer cannot be included in a consolidated tax return with non-life companies until the life company has been affiliated with the group for 5 years. Under the second rule, net operating losses of a non-life member cannot be used to offset the life insurer’s income unless the non-life member has been part of the group for 5 years.
A third rule, the “35% rule,” applies after the two 5-year rule thresholds are met.
