I 
119TH CONGRESS 
1ST SESSION H. R. 1481 
To amend the Internal Revenue Code of 1986 to establish a system for 
the taxation of catastrophic risk transfer companies to ensure sufficient 
capital to cover catastrophic insurance losses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 21, 2025 
Mr. LAHOOD (for himself and Mr. HIMES) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on the Judiciary, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to establish 
a system for the taxation of catastrophic risk transfer 
companies to ensure sufficient capital to cover cata-
strophic insurance losses, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Catastrophic Risk 
Transfer Act of 2025’’ or the ‘‘CART Act of 2025’’. 
VerDate Sep 11 2014 
20:42 Mar 17, 2025
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1481.IH
H1481
ssavage on LAPJG3WLY3PROD with BILLS
SEC. 2. TAXATION OF CATASTROPHIC RISK TRANSFER 
COMPANIES. 
(a) IN GENERAL.—Subchapter M of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new part: 
‘‘PART V—CATASTROPHIC RISK TRANSFER 
COMPANIES 
‘‘Sec. 860M. Catastrophic risk transfer companies. 
‘‘Sec. 860N. Taxation of catastrophic risk transfer companies. 
‘‘Sec. 860O. Taxation of security holders of catastrophic risk transfer company; 
limitations applicable to dividends received from catastrophic 
risk transfer company. 
‘‘Sec. 860P. Dividends paid by catastrophic risk transfer company after close 
of taxable year. 
‘‘SEC. 860M. CATASTROPHIC RISK TRANSFER COMPANIES. 
‘‘(a) GENERAL RULE.—For purposes of this subtitle, 
the term ‘catastrophic risk transfer company’ means any 
domestic corporation which— 
‘‘(1) is— 
‘‘(A) created or organized under the laws 
of a State which has enacted a State law which 
enables the organization and licensure of a spe-
cial purpose insurer (whether or not designated 
as such under such State law) which is capable 
of carrying out the activities described in para-
graph (2), and 
‘‘(B) regulated and licensed as such a spe-
cial purpose insurer by the State commissioner 
VerDate Sep 11 2014 
20:42 Mar 17, 2025
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H1481.IH
H1481
ssavage on LAPJG3WLY3PROD with BILLS
of insurance or other State official charged with 
regulation of insurance within the State, 
‘‘(2) the principal purpose of which is the car-
rying out of the activities of catastrophic risk trans-
fer, but only if— 
‘‘(A) substantially all of such activities re-
late to business other than general annuity 
business, and 
‘‘(B) such activities are limited to— 
‘‘(i) issuing equity and debt securities, 
‘‘(ii) owning qualified investments, 
and 
‘‘(iii) entering into one or more insur-
ance or reinsurance agreements covering 
catastrophic risks from persons who are 
not related to such corporation at any time 
during the period beginning with the date 
such agreements are entered into and end-
ing with the last day of the period such 
agreements are in effect, and 
‘‘(3) is authorized by the State commissioner of 
insurance or other State official charged with regula-
tion of insurance within the State to carry out the 
activities of catastrophic risk transfer. 
VerDate Sep 11 2014 
20:42 Mar 17, 2025
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1481.IH
H1481
ssavage on LAPJG3WLY3PROD with BILLS
‘‘(b) LIMITATIONS.—A corporation shall not be con-
sidered a catastrophic risk transfer company for any tax-
able year unless— 
‘‘(1) it files with its return for the taxable year 
an election to be a catastrophic risk transfer com-
pany or has made such election for a previous tax-
able year, 
‘‘(2) at least 90 percent of its gross income is 
derived from— 
‘‘(A) investment income from qualified in-
vestments, and 
‘‘(B)(i) reinsurance premiums received 
from a regulated insurance company, or 
‘‘(ii) insurance premiums from— 
‘‘(I) a governmental agency, 
‘‘(II) a company the assets of which 
exceed $100,000,000, or 
‘‘(III) a company that is transferring 
a sufficiently large pool of a single type of 
underlying risk that the insurance of such 
pool of risk would on a stand-alone basis 
constitute operation of an insurance busi-
ness under part II of subchapter L, and 
‘‘(3) the limit of the insurance or reinsurance 
being provided is fully collateralized. 
VerDate Sep 11 2014 
20:42 Mar 17, 2025
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1481.IH
H1481
ssavage on LAPJG3WLY3PROD with BILLS