The Chief Executive Officer of the London and International Insurance Brokers’ Association (LIIBA), Christopher Croft, has welcomed new regulations from the US Internal Revenue Service (IRS) and Department of the Treasury to reduce the burden of complying with FATCA (Foreign Account Tax Compliance Act).
FATCA in its original form essentially requires every financial institution to seek out any of its customers who may be considered a “U.S persons” and submit their names, account numbers, and account balances directly to the IRS.
The U.S Treasury this morning issued regulations excluding non-cash value property and casualty insurance premiums from regulations implementing the FATCA. The announcement is retroactive and applies to all open tax years.
“LIIBA warmly welcomes the news that the burden of FATCA is to be removed from our members,” said Croft.
“We have argued for this, in partnership with our colleagues at Council of Insurance Agents and Brokers (CIAB) since the Act was first proposed.”
“It is a testament to the skill and tenacity of CIAB’s work on this that IRS has now recognised this is the right course of action. Congratulations must go to them. This is excellent news for LIIBA members and the London market as a whole.”
Ken A. Crerar, CEO and President of the CIAB said the move is considered a major victory by the council and is the result of ongoing advocacy efforts in Congress and with the IRS.
“We’ve long argued that non-cash value insurance premiums had no relevance to tax evasion regulations, and we’re extremely grateful for Treasury’s move this morning,” said Crerar.
“We’re extremely gratified this morning that the IRS excluded property/casualty insurance premiums from the FATCA reporting requirements.”
“The FATCA regulations have long been a regulatory headache for the global commercial insurance and reinsurance industry.”
“The compliance acrobatics that our members pursued to comply with the law served no purpose, as property/casualty insurance premiums have no-cash value to them and are irrelevant to the tax evasion regulations set forth by FATCA.”
