Federal Income Taxes - Provisions Affecting Property/Casualty Insurers

This paper describes the most significant provisions of the current tax code (referred to as the Internal Revenue Code of 1986) affecting property/casualty insurers, and provides an analysis of the impact which changes in certain investment, underwriting, and other operating results have on insurers’ taxes and after-tax earnings. The paper includes simplified tax calculations that are not intended to list exhaustively or precisely all tax provisions nor are they intended to enable the reader to precisely calculate taxes for any given insurer. The examples are intended to illustrate the dynamics and interaction of the various provisions of the tax code.