WASHINGTON, July 23 -- The office of Sen. Tom Harkin, D-Iowa, issued the following news release:
Iowa Senators Tom Harkin and Chuck Grassley led a bipartisan group of five senators in introducing legislation to increase the alternative tax liability limitation for small property and casualty insurance companies.
These small companies largely serve rural communities, which rely on this adjustment to provide additional surplus and cash flow use to pay customer's insurance claims. Currently, property and casualty insurance companies with annual premiums above $350,000 but less than $1.2 million can elect to be taxed on their net investment income as opposed to their annual operating income. The Small Mutual Inflation Update would adjust the eligible premium index for inflation - for the first time since 1986 - to $2.012 million, increasing the current maximum limit and indexing it to inflation thereafter. The legislation was cosponsored by Senators Roy Blunt (R-MO), Amy Klobuchar (D-MN), and Jay Rockefeller (D-WV). "Put very simply, this legislation will benefit Iowa's small insurance companies," said Harkin. "These companies have served Iowa communities for decades, and are an integral part of Iowa's economy. I hope that the Senate Finance Committee will adopt this commonsense proposal as they move forward on tax reform in the coming months." "Some thresholds in tax law aren't indexed for inflation, and that means they become outdated," said Grassley. "Our legislation updates a key threshold for small insurance companies so they can continue serving their rural customers. This legislation helps to ensure that small mutual insurance companies will continue to be able to serve rural residents who have unique circumstances, such as living far from a fire station, and so are often unable to obtain private property insurance through traditional insurance companies."
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