H.R. 1070: Restoring Competitive Property Insurance Availability Act

The bill known as the "Restoring Competitive Property Insurance Availability Act" proposes amendments to the Internal Revenue Code of 1986, specifically targeting income generated by specific insurance companies after federally declared disasters. Here’s a breakdown of the key elements of the proposed bill:

Exclusion of Income for Insurance Companies

The bill aims to exclude certain types of income from the taxable income of specified insurance companies during a designated recovery period after a federally declared disaster. This exclusion applies only to companies that provide real property insurance within the affected disaster areas.

Definitions and Terms

• Specified Insurance Company: This term refers to any insurance company (excluding life insurance companies) that was providing real property insurance for properties located in the disaster area immediately before the disaster incident date.
• Qualified Real Property Insurance Income: This is defined as the excess of premiums received by the specified insurance company for real property insurance in the disaster area, minus any deductions applicable to those premiums.
• Real Property Insurance: This includes coverage for risks related to personal property if those risks are covered under the same policy as the real property risks and if the personal property is located on that real property.
• Recovery Period: This term refers to the first five taxable years following the incident date of the disaster.
• Disaster Area: The areas defined as such according to existing regulations (specifically section 7508A(d)(3) of the Internal Revenue Code).
• Incident Date: The earliest date noted in the disaster declaration for that area.

Clerical Amendments

The bill also includes a clerical amendment to update the table of sections in the tax code by adding this new provision regarding the exclusion of income from real property insurance post-disaster.

Effective Date

The changes introduced by this bill would be effective for disaster areas where the incident date occurs after December 31, 2024.

Summary of Impact

In essence, the bill is designed to provide a financial incentive for insurance companies to continue offering real property insurance in disaster-prone areas. By excluding certain income from taxes, the goal is to bolster the availability of insurance in these regions, potentially leading to more competitive pricing and greater accessibility for property owners in the aftermath of disasters.

Relevant Companies

• ALL - Allstate Corporation: As a significant provider of property insurance, Allstate could benefit from this bill if it operates in areas affected by federally declared disasters.
• PRU - Prudential Financial, Inc.: Prudential, which offers property insurance among other services, may find its tax liabilities reduced under this bill when it provides coverage in disaster areas.
• PHLY - Philadelphia Insurance Companies: Specializing in various forms of commercial and personal insurance, Philadelphia Insurance could see a beneficial financial impact if it offers services in designated disaster areas.