El Salvador: Tax Reform Drives Off Reinsurers

Some reinsurance companies argue that the country won't be attractive for business if the tax reform bill gets approved.

Thursday, November 26, 2009

With this bill they will have to pay 5% income tax, and those reinsurers based on tax havens will be charged with an additional 25%.

From Elsalvador.com: "In a letter to the Salvadoran Association of Insurance Companies, reinsurer Hannover Re remarked they are assessing whether they maintain their operations in the country, or if they increase some reinsurance contracts, especially those with variable conditions, which could become more expensive with the tax hike. Another reinsurer, Gen Re, shares this point of view".



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Reinsurers to Pay $3.4 Million for Tropical Storm Ida

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In El Salvador, payments for Ida damage claims will be larger than those caused by Hurricane Stan.

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"These figures arise in the midst of a tax reform discussion that could drive away 8 reinsurers that operate in the country.

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