Tax Reform

General Overview 

Transamerica actively advocates on a variety of corporate and product-related tax issues before the House Ways and Means Committee and the Senate Finance Committee.  Many of our life insurance, annuity, employee benefit, retirement, and asset management products are directly tied to the federal tax code so it’s important we share our views on any regulatory or legislative proposals that would impact them and, by implication, our policyholders, annuitants, customers, plan sponsors or plan participants.   

Ordinary Treatment & 7702 

Transamerica is actively lobbying to have two life insurance tax-related proposals included in the next COVID-related response package. The first would change the tax treatment of debt instruments sold by insurance companies from capital to ordinary thereby matching the tax treatment of other financial institutions particularly banks. This change would help insurers remain the largest purchaser of corporate bonds in the economy, as well as help preserve the availability and affordability of our life insurance products. The second provisions would index two fixed interest rates in Section 7702 of the tax code applicable to long term whole life policies to better reflect the sustained low interest rate environment. 


Looking Forward:  Transamerica is already anticipating how to respond to a variety of corporate, product and individual tax proposals that may be offered to help pay for the large COVID-related measures passed earlier this year.   For example, it’s likely we will see proposals to: increase the corporate tax rate; change the tax treatment of defined contribution plans; create a financial transactions tax; tax life insurance proceeds; increase payroll taxes; limit corporate deductions and exclusions; and more.