Rules Define ‘Related’ Insurance Income Too Broadly, Groups Say

New proposed regulations on domestic partnerships’ foreign income use too broad a brush in defining a particular type of insurance income, insurance-industry trade groups told the IRS Thursday.

The proposed regulations significantly expand the definition of “related person insurance income,” or RPII, in an “inappropriate” way, the American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies, and the Reinsurance Association of America said in a comment letter.

• The effect is to treat routine transactions by commercial insurers and reinsurers as involving RPII, when the concept of RPII is intended only to prevent tax avoidance by ...