Advertise
Resources
Member, Beacon International Group, Ltd.
BERLIN-A new change in German tax rules allows insurers and reinsurers to increase the reported value of their shareholdings.
Under the previous rule-known as the "lowest valuation principle"-German insurers and reinsurers had to value their shareholdings at the lowest level individual shares have reached during the accounting period. The change allows insurance industry companies to value their shareholdings at prices that better reflect the investments' worth over a longer period.
The new rule, which will affect companies' underwriting capacity, brings the treatment of insurers in line with that of other German companies.
The change comes at a time in which claims from the Sept. 11 terrorist attacks, combined with weakening global stock markets, threatened insurers and reinsurers with the prospect of having to sell large portions of their shareholdings.
A spokeswoman for the German Justice Ministry said the change will be retroactive to Sept. 30, 2001.
The German Insurance Assn. led the campaign for the change.