US President Barack Obama yesterday repeated a proposal that would increase the amount of US tax paid by some Bermuda reinsurers.The plan to “disallow the deduction for excess non-taxed reinsurance premiums paid to affiliates” appears as a revenue-raising measure in the President’s Fiscal Year 2013 Budget plan.Similar proposals have appeared in Mr Obama’s budget plan in each of the last two years. This year’s proposal seeks to raise $111 million in 2013 and around $2.45 billion over a ten-year period.The idea resembles the Neal Bill, which aim to raise about $2 billion a year.The measure would not single out Bermuda, as it would apply to all non-US insurance groups. If the plan becomes law, Bermuda groups with US affiliates who cede back some of the US insurance premiums to the parent company in the form of reinsurance contracts can expect to pay more tax.Ace, XL Group and Arch Capital Group are among the Bermuda market players who would be most significantly impacted should the measure become law, according to analysts.Mr Obama’s move was yesterday strongly opposed by the Coalition for Competitive Insurance Rates (CCIR), one of whose members is the Association of Bermuda Insurers and Reinsurers (ABIR). The group argued that the proposal was very ill-timed, coming after a string of catastrophes generated total insured losses of more than $105 billion.“2011 should serve as a wake-up call to those who wish to impose limits on global risk distribution via reinsurance,” said Dan Kugler, board liaison to the Risk and Insurance Management Society (RIMS) External Affairs Committee.“The President’s proposal ignores the facts: instituting this tax would significantly reduce America’s ability to manage volatile, catastrophic insurance risk, and would further burden American homeowners, large and small businesses and public sector organisations during these challenging economic times.”The CCIR pointed out that domestic private insurance and reinsurance markets depend on international reinsurance markets to manage the enormous US property catastrophe risk and to add to local capacity to meet consumer needs.“This proposed tax would benefit a few insurance companies at the expense of their competitors while making insurance more costly for hard-pressed homeowners and small businesses,” said Bill Newton, executive director of the Florida Consumer Action Network. “If the supply of insurance is reduced, then the price for insurance will rise; it’s that simple. In today’s economy, the White House and Congress should avoid imposing enormous new tariffs on non-US insurers that will only serve to disproportionately burden consumers and businesses in states like Florida that are most vulnerable to natural disaster.”In November 2011, Florida lawmakers sent a letter to the House Ways and Means Committee urging its members to oppose the establishment of a “punitive” tax on reinsurance that would, as the letter stated, “lead to higher premium costs for citizens of Florida, and the rest of the nation”.The $3.8 trillion budget proposes new taxes that would bring in revenue of $1.5 trillion over the next decade.