A tax shelter for U.S. insurance companies may be eliminated if members of Congress have their way. The shelter makes it possible for these companies to stop paying income taxes by simply moving their headquarters to Bermuda.
According to a New York Times article, six insurance companies have already started using the loophole. They either moved their offices to Bermuda or were acquired by a Bermuda insurer.
Of course, the code is not intended to allow this type of activity, so Congress is looking into the issue. Four other insurers have joined the fight as well. Those insurers contend that the shelter gives an unfair disadvantage to those companies staying in the U.S. and that the government’s revenue could be drastically reduced.
The four insurance companies are Chubb, Hartford, Kemper and Liberty Mutual.