This is just a quick follow up post to provide a bit of commentary on the Voya deal and how the flow reinsurance arrangements might be impacted by the tax bill.

My understanding is that the flow reinsurance deals I wrote about previously will not be materially impacted by the new tax bill. The bill did address a Bermuda tax “loophole,” but in reading the commentary on the provision, it appears that the loophole targeted by the bill is not really what these annuity reinsurance deals are using. Part A of the loophole, as I understand it, allowed firms to pay reinsurance premiums to Bermuda-based subsidiaries and take a tax deduction for the premium while not paying any corporate tax in Bermuda.