Iowa will lower the amount of reinsurance tax due from some captive companies under a bill signed by Governor Kim Reynolds last week.
HF 2636 lowers the tax on premiums written above $60 million to 0.02 percent, down from 5 percent. Premiums written above $40 million will be taxed at 0.045 percent. The bill keeps the tax rate of 0.02 percent on the first $20 million of premium and 0.125 percent on the next $20 million.
The bill, which received unanimous approval in the House and Senate, goes into effect immediately.
Iowa lawmakers last year approved SF 549, allowing the formation of captive insurance companies in the state. Captives are a form of self-insurance where the insurance provider is owned entirely by the insurance holder.
SF 549 authorizes the formation of pure, association, protected cell, special purpose and industrial insured captives.
Topics Reinsurance
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