PRIA Logo™
119-hr-2567119th CongressWALLET

To amend the Internal Revenue Code of 1986 to provide special rules for purposes of determining if financial guaranty insurance companies are qualifying insurance corporations under the passive foreign investment company rules.

Sponsored By: Representative Moore, Gwen [D-WI-4]

Introduced

Summary

Special PFIC (passive foreign investment company) rules for financial guaranty insurers. The bill would create tailored PFIC tests and reporting rules for financial guaranty insurance companies, add clear definitions of exposure ratios, and set a transitional grace period for certain stock treatment.

Show full summary
  • Financial guaranty insurers would be able to count unearned premium reserves as part of their insurance liabilities for PFIC tests when GAAP limits reserve reporting and the company meets exposure ratios of at least 15-to-1 for financial guaranty exposure or 9-to-1 for state or local bond exposure.
  • U.S. owners of specified non-public foreign corporations would face new Treasury reporting requirements if the foreign firm would be a PFIC absent the special rules.
  • The bill would create a special grace period and transitional rules for qualified FGIC stock for taxable years after Dec. 31, 2024, including an alternate 8-to-1 test for certain earlier years and authority for the Secretary to issue regulations on revoking PFIC elections and handling periods after PFIC status ends.

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 1 costs, 1 mixed.

PFIC grace period for guaranty insurers

If enacted, your PFIC holding period would skip a grace period for stock in a qualified financial guaranty insurer. The grace period runs from the company’s first tax year after Dec 31, 2017 through its last tax year beginning before Jan 1, 2025. For years ending before Jan 1, 2019, the 9-to-1 test would use 8-to-1. Treasury would issue rules for when a company stops being a PFIC, including how to revoke certain elections. This would apply for company tax years beginning after Dec 31, 2024.

PFIC rules for financial guaranty insurers

If enacted, some financial guaranty insurers would be treated as meeting an alternative PFIC test. The Treasury Secretary would decide if they follow the October 2008 NAIC guideline. These insurers could count unearned premium reserves as insurance liabilities, but only if three rules are met. GAAP must bar loss reserves except when losses exceed unearned premiums; the insurer shows at least 15-to-1 guaranty exposure or 9-to-1 state or local bond exposure; and only reserves within the Guideline’s single risk limits, using shareholders’ equity, are counted. The bill would also clarify what counts as a separately reported item on a financial statement for PFIC tests. These changes would apply to tax years starting after Dec 31, 2024, and the reporting clarification would apply to reports made after that date.

New reporting for some foreign company owners

If enacted, U.S. persons who own some non-public foreign companies could face a new filing. If you claim the company is not a PFIC, Treasury could require you to report details about it. This applies when the company would be a PFIC without the insurance-company exception and its interests are not traded. The reporting would start for filings made after Dec 31, 2024.

Sponsors & CoSponsors

Sponsor

Moore, Gwen [D-WI-4]

WI • D

Cosponsors

  • Rep. Smith, Adrian [R-NE-3]

    NE • R

    Sponsored 4/1/2025

  • Rep. Sewell, Terri A. [D-AL-7]

    AL • D

    Sponsored 1/6/2026

  • Rep. Miller, Max L. [R-OH-7]

    OH • R

    Sponsored 1/6/2026

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
Back to Legislation