H.R. 1070: Restoring Competitive Property Insurance Availability Act

HR1070 creates a new tax exclusion for insurance companies that were already writing real property insurance in a federally declared disaster area before the disaster hit. The bill adds a new section 836 to the Internal Revenue Code of 1986 and lets a "specified insurance company" exclude "qualified real property insurance income" from gross income during the recovery period.

The bill is tightly targeted. A "specified insurance company" means any insurance company other than a life insurance company that, immediately prior to the incident date, provided real property insurance for property located in the disaster area. The tax benefit only applies in a "disaster area" as defined by section 7508A(d)(3), and only if the incident date is after December 31, 2024.

The amount excluded is also defined with precision. "Qualified real property insurance income" is the excess of premiums received for real property insurance on property in the disaster area over deductions properly allocable to those premiums. "Real property insurance" is defined broadly enough to include risks tied to personal property when that personal property is covered under the same policy as the real property and is located on that real property.

The tax break lasts through the "recovery period," defined as the first 5 taxable years ending after the incident date for the disaster area. In practical terms, the bill is trying to make it more attractive for property insurers to keep writing or renewing coverage in places hit by federally declared disasters. But the bill does not set any funding amount, consumer premium cap, coverage mandate, or direct requirement that insurers pass savings on to homeowners or businesses.