CCIR Urges Rep. Neal to Consider Economic Impact of Pending Legislation.

WASHINGTON -- In a letter to Representative Richard Neal (D-MA) sent today, the Coalition for Competitive Insurance Rates (CCIR) urged Neal to consider the views of consumers, state officials, European governments and trade experts before re-introducing his widely expected legislation which would impose higher taxes on foreign-owned insurance and reinsurance providers. In addition, CCIR pointed to numerous "unsubstantiated assertions" in a "white paper" released last week by companies who stand to benefit from Representative Neal's proposal.

CCIR re-emphasized the findings in the comprehensive economic analysis conducted by The Brattle Group, a Massachusetts-based economic consulting firm, that the legislation "would cause consumers to pay $10-12 billion more per year to obtain the same coverage. This explains why the stakeholders who are most concerned about pricing (such as the Consumer Federation of the Southeast and insurance regulators from Louisiana, South Carolina and Mississippi) have all opposed the legislation."

The Brattle Group's report was authored by Dr. J. David Cummins, professor of Risk Management, Insurance and Financial Institutions at Temple University and at the Wharton School at the University of Pennsylvania, and The Brattle Group's Dr. Michael Cragg and Dr. Bin Zhou. The report warns that Representative Neal's proposal could have devastating effects on the cost and availability of insurance coverage in the United States by reducing the supply of reinsurance in the US by $19-22 billion.

In its letter to Representative Neal, CCIR also criticized the "white paper" circulated last week by the US companies who support Neal's legislation, citing that it "contains unsubstantiated assertions some of which are flatly contradicted by the facts."

"We hope that Congressman Neal reviews our letter and agrees to take a critical look at US companies' attempt to rebut the economically sound findings of the Brattle study and the concerns of the nearly 40 businesses, consumer groups and experts who have publicly opposed this legislation," said Brad Kading, executive director of CCIR. "The 'white paper' document contains the unsupported opinions of the handful of companies who might benefit from this tax increase."

The Coalition for Competitive Insurance Rates includes major U.S. business and consumer organizations such as the Risk and Insurance Management Society, the Florida Consumer Action Network, and the National Risk Retention Association.