The office of US Representative Eleanor Holmes Norton has confirmed that she is looking to reintroduce a bill that would bring tax advantages for re/insurers who base there and potentially turn Washington DC into ‘Bermuda on the Potomac’.The new draft bill, which would allow insurers to create tax-deferred catastrophe reserve funds, is circulating around Washington, DC.This will be the third time the Democratic Congresswoman has put forth such legislation that would amend the federal tax code to make Washington DC a special tax jurisdiction.Her intention to refloat the legislation was confirmed by a spokesperson for her office in response to this newspaper’s query.One of Bermuda’s major competitive advantages as an insurance industry domicile is that it does not levy taxes on reserves, while US states do. To qualify for the programme, private insurers would have to domicile the funds in Washington DC.The news that the bill had resurfaced was first reported by BestWeek, a publication issued by ratings firm AM Best, which states that the draft bill is currently under review by state insurance regulators.In October last year, Congresswoman Norton introduced the District of Columbia National Disaster Insurance Protection Act in the hopes of pumping new income into the US capital.“Retaining funds here in the US would fuel both the local and US economies, would provide the protection of US laws for individuals and businesses with property and casualty insurance and would protect US taxpayers, who would otherwise likely have to pick up the tab if there were a failure in reserve fund availability,” she said at the time.According to BestWeek, the new version of the legislation comes with strings attached, in that the catastrophe funds reserves would be under the regulation administered by the Federal Insurance Office (FIO).That particular stipulation is being met with resistance, the article states, in that some in the insurance industry view the oversight of the FIO as burdensome and unneeded. Another issue is that some reinsurers view the legislation as putting the US government in competition with them, driving down rates to unsustainable levels.BestWeek reports that the draft bill describes covered events as windstorms, earthquakes, winter catastrophe, fire, tsunami, flood, volcanic eruption, hail and acts of terrorism. Lines of business that would qualify under the bill include fire, allied, farm owners’ multiperil, homeowners’ multiperil, commercial multiperil, earthquake and inland marine.Dennis Burke, vice-president of the Reinsurance Association of America, told BestWeek that he was sceptical of the notion that states would somehow allow companies to set up domiciled offices for catastrophic funds in the District only, without taking action.