Tax reform catches industry off guard: PollReprints
Nearly 90% of insurance organizations were not fully prepared for the impacts of tax reform on their institutions, according to a flash poll conducted by accounting firm Baker Tilly Virchow Krause L.L.P.
“The passage of the Tax Cuts and Jobs Act represents the largest tax overhaul since the Tax Reform Act of 1986,” Carrie Small, partner with Baker Tilly’s insurance tax practice, said in a statement on Tuesday. “Although the (act) was meant to simplify the tax code, insurance organizations have found the bill’s many provisions challenging to decipher.”
Key provisions applicable to property/casualty insurers include the modification of proration and discounting rules and special estimated tax payments.
“Since the bill was signed into law in 2017, all companies are required to re-measure their deferred tax assets and deferred tax liabilities as of the Dec. 22, 2017, enactment date,” Michael Gehr, senior manager with Baker Tilly’s financial services practice, said in the statement. “Because of this, there is an immediate action item that all insurance organizations must do as a result of tax reform.”