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California Commissioner Wants Insurers to Pass Tax Savings to Policyholders
California Insurance Commissioner Dave Jones wants insurers in his state to pass along savings from taxes expected to be generated by the new tax bill passed in Congress recently.
“The recent revision to the Federal Tax Schedule for 2018 reduced the corporate tax rate from 35 percent to 21 percent,” Jones said in a statement. “That means that nationally insurers will now be able to retain even more of policyholder premiums as profit.”
Jones in his statement noted that in California the prior approval process that applies to property/casualty insurance rates limits insurer profits.
California Insurance Commissioner Dave Jones
“I have directed my staff to commence a regulatory review of these insurers’ rates given the major tax windfall under the new federal tax rules,” Jones said. “I have also directed staff to consider and identify possible actions in other lines of business where insurers will benefit from the tax cut to see if we can enable their policyholders to also benefit from the lower corporate taxes paid by their insurers.”