Bills · HR 1481
IN COMMITTEE· 119TH CONGRESS
House BillHR 1481Taxation
CART Act of 2025
INTRO FEB 21· LAST ACTION FEB 21
READING
19MIN
COSPONSORS
2
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenThis bill matters because it tries to strengthen the financial safety net for major disasters, which are becoming more frequent and costly. By creating a specific tax framework for "Catastrophic Risk Transfer Companies," it aims to ensure these specialized firms hold enough capital to cover huge insurance losses from events like massive hurricanes, earthquakes, or widespread health crises. If these companies are more stable, it could help regular insurance companies manage their own risks better, potentially leading to more reliable insurance coverage for homes, businesses, and even life insurance.
Without this bill, the rules for these specialized companies might remain less defined in the tax code, potentially leading to less transparent capital requirements or a less stable system for managing large-scale risks. By establishing clear tax rules, the bill seeks to formalize their role in the financial system, potentially improving the overall resilience of the insurance industry when faced with catastrophic events that could otherwise cause widespread financial disruption.
KEY PROVISIONS
5AI-extractedPROVISION 01
Establishes a new tax category called "Catastrophic Risk Transfer Companies" within the Internal Revenue Code.
This creates a specific regulatory and taxation framework for specialized entities handling large-scale, low-probability risks.
PROVISION 02
Defines what qualifies as a "Catastrophic Risk Transfer Company," including requirements for state licensure, primary purpose, and limited business activities.
This clearly outlines which companies are subject to the new tax rules and their operational boundaries.
PROVISION 03
Requires these companies to derive at least 90% of their gross income from qualified investments or catastrophic risk premiums and to fully collateralize their insurance obligations.
These financial safeguards are designed to ensure the companies maintain sufficient capital to cover potential catastrophic losses.
PROVISION 04
Defines "catastrophic risk" as a loss with low likelihood but large amount, setting a minimum of $25,000,000 for direct insurance losses.
This provides a clear threshold for the types of risks this new company category is intended to manage.
PROVISION 05
Imposes a tax penalty on companies that fail to meet the 90% gross income test, unless the failure was due to reasonable cause and disclosed.
This incentivizes compliance with the income requirements designed to ensure financial stability.
SPONSORSHIP
1 + 2
R· Illinois
YRS IN OFFICE
11
BILLS LED
38
COSPONSOR BREAKDOWNBIPARTISAN · 0%
DEM 2 REP 0 IND 0
ACTION TIMELINE
2 EVENTSFEB 21
Introduced in House
FEB 21
Referred to the Committee on Ways and Means, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
BILL INFO
TypeHouse Bill
NumberHR 1481
Congress119th
StatusIn Committee
IntroducedFeb 21, 2025
Last actionFeb 21, 2025
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IN COMMITTEE· 119TH CONGRESS · JUDICIARY COMMITTEE · INTRODUCED FEB 21, 2025
House BillHR 1481Taxation
CART Act of 2025
INTRODUCED FEB 21, 2025· LAST ACTION FEB 21, 2025
PASSAGE CHANCES
—%
READING
19 min
COSPONSORS
2
COMPLEXITY
Moderate
