Two former US trade representatives have backd the Bermuda insurance industry’s opposition to changes that would impose extra taxes on non-US insurance groups.Mickey Kantor and Susan Schwab jointly authored a letter to the Subcommittee on Select Revenue Measures of the US House of Representatives, arguing that the proposed targeted tax increases would violate world trade rules.Mr Kantor, who was the guest speaker at the Business Bermuda general meeting in 2008, served in the Clinton administration, while Ms Schwab worked for President George W Bush.The letter, dated July 5 this year and addressed to subcommittee chairman Rep. Patrick Tiberi and ranking member Rep. Richard Neal, states: “We write to underscore our policy and legal concerns with a number of proposals to dramatically increase taxes on the use of foreign affiliated reinsurance, including the proposal contained in the Administration’s FY 2012 Budget.“We believe that such proposals violate US obligations under the World Trade Organisation’s (WTO) General Agreement on Trade in Services (GATS). Many such proposals are discriminatory in nature, or impose conditions on access to the US market that are incompatible with US commitments. Enacting such proposals would leave many critical US export sectors vulnerable to WTO-authorised retaliation.“It would also damage the ability and credibility of the US in its efforts to open foreign markets to US insurance and reinsurance services. Finally, restricting the supply of reinsurance products would cause harm to US insurance consumers in certain regions of the country and key sectors of the US economy.”The tax increase proposals were originally made in the Neal bill, which has received little support in Congress and has remained on the political back burner. Similar measures, although less severe on insurers, were proposed earlier this year by President Obama in his 2012 Budget plan.The proposals include levying taxes on premiums ceded by US insurers to their non-US affiliates in the form of reinsurance. The move does not single out Bermuda.The Coalition for Competitive Insurance Rates, whose members include the Association of Bermuda Insurers and Reinsurers (ABIR), has argued that the proposal would result in higher insurance premiums for US insurance buyers and less availability of insurance in catastrophe-prone areas.Mr Kantor and Ms Schwab argued that under WTO rules, a proposal “cannot arbitrarily restrict competition and protect domestic servicers”.“At a time when the US is rightly pressing a number of emerging markets to maintain competition in the insurance sector, meeting our WTO commitments in the financial services arena is critically important,” the pair added. “In addition, these are the export markets the US needs to meet the President’s goal of doubling US exports.“In short, now is not the time to have a retreat in global US leadership in the services sector. Whether it is in the context of “pay-fors” for any number of worthy legislative proposals, or as a part of a larger reform of the US tax code, WTO obligations and the US commitment to competition should bear heavily in any analysis.”