Rick Scott Speaks Out on Reinsurance Tax Legislation

Gov. Rick Scott is joining a number of state and local officials who are voicing their opposition to legislation denying tax deductions for certain reinsurance premiums paid to foreign-based affiliates of domestic insurers. In a letter to Congressman Vern Buchanan, R-Fla., the governor warned that the legislation could have a "disastrous impact" on small businesses and homeowners in Florida.

Gov. Scott asked Buchanan to oppose the president's budget proposal and any similar legislation in Congress containing the reinsurance tax.

In a state like ours, which is most vulnerable to natural disasters, the Brattle Group estimates that consumers could see their insurance bills increase by more than $817 million as a result of the proposed reinsurance tax, said Gov. Scott in his letter. The price of commercial multi-peril insurance would increase by 12.6 percent or $264 million a year in added costs for Florida businesses, and the price of homeowners multi-peril insurance would increase by 4.2 percent, resulting in $266 million a year in added costs for Floridas families.

"Florida needs this global reinsurance capacity, Gov. Scott added, and the reinsurance tax included in the presidents proposal and the Neal-Pascrell-Menendez bill would damage our states economic recovery by increasing insurance costs for our policyholders.