In June, Wyden pressed the Treasury Department to explain why hedge fund insurers continue to proliferate after the IRS promised a crackdown in 2003.
Claims Costs
The U.S. sought to target firms that have less of a focus on underwriting insurance risks, a distinction that can be complicated. Metrics that classify companies based on claims costs, reserves or investment income can be misleading because the figures fluctuate year-to-year based on financial markets and the frequency of hurricanes.
“Anyone that spent a day in our office would clearly see that we’re a real insurance company,” Chris Coleman, chief financial officer of Third Point Re, said at a conference in March.
Evan Greenberg, chief executive officer of Zurich-based Ace Ltd., cited the U.S. push to adjust tax treatment of insurers as an example of the “runaway regulatory environment” that he said is hurting an essential industry. Ace is starting a reinsurance venture in Bermuda with BlackRock Inc.
“Efforts to enact comprehensive tax reform may once again target taxation of foreign affiliate reinsurance used to efficiently manage risk and capital,” wrote Greenberg in his most recent annual report to shareholders.
Greenlight Re climbed 0.1 percent to $30.34 as of 10:26 a.m. in New York trading. Validus was unchanged, and Third Point Re slipped 0.9 percent.