Free Consultation 877.583.2524
We do not handle social security disability claims
logo celebrating

Nationwide Leaders in Disability Insurance Law

shook hands

Short Term Impact of Tax Reform May Be Bad for ERISA Disability Insurance Claims

Tuesday, January 2nd, 2018

At first glance, a lowered corporate tax rate would seem to be a boon to large insurance companies. Experts expect that it will, in the long-term, but in the short term, there will be some belt-tightening to occur, and we predict that ERISA disability claimants will be the ones to feel the pinch first.

As reported by Yahoo Finance in “Insurers to Endure a Hitch Before Tax Reform Gains, the initial impact of tax reduction in the insurance sector will be in the form of a write-down in deferred tax assets (DTAs). This is also likely to a take a hit at insurance company’s risk-based capitalization levels. DTAs arise when an insurer records an asset equal to the expected future amount of the tax deduction, because of the requirement to discount loss and unearned premium reserves.

Rating agency Standard & Poor’s estimates that its rated U.S. life insurers had about $35 billion of DTA on their statutory balance sheets as of Sep 30, 2017.

The new tax bill requires some insurers to write down DTAs to align their balance sheets to the new tax regime.

Per the S&P, the reform will lead to an aggregate write-down of about $14 billion of life insurers’ DTA, representing 4% of statutory capital. Consequently, this will hit the capitalization levels of some insurers. Deterioration in Risk Based Capital at regulated subsidiaries would also impact subsidiaries’ ability to pass on dividend capital to the holding company.

What might this mean for you, the disability insurance claimant? We tend to be cynical, but we think that whenever an event causes an insurer to lose significant sources of money, or the use of the money, they will tend to seek to recover some or all of that money (through the fairly discrete ways it can). One of these ways is through claim “recoveries” – which some might argue means termination of ongoing claims.

For now, we are advising clients to continue to be vigilant about filing claims for disability benefits and preserving your claim if it is ongoing. However, if you are concerned that your disability insurance claim may be challenged, call our office today at 877-LTD-CLAIM (877-583-2324) and find out how we help.

If your LTD claim has been denied and you want to pursue an appeal, we strongly suggest contacting our office to learn how we can assist you during the appeals process. You don’t want to do this alone, and you don’t have to.

Justin C Frankel

Written By:

Justin C. Frankel - Disability Insurance Attorney

Justin Frankel is a founding partner of the disability insurance law firm Frankel & Newfield and is a highly skilled litigator and advocate. He has published numerous articles on the challenges facing clients with private or individual disability insurance policies and those who own group or ERISA disability insurance policies.

Learn more about Justin | See Justin’s Publications



Ready To Talk?

Fill out the form to request a FREE legal consultation

Sorry, we do not handle SSDI/Social Security claims.

Frankel & Newfield does not currently handle any Social Security Disability Insurance claims.


*Required fields are marked

I have read the disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


This is about a Social Security Disability claim.

Ipad image

Download Our Free eBook


Secrets the Disability Insurance Companies Don't Want You to know!

Sign Up for our mailing list to receive disability insurance law updates

Your information is 100% secure and will never be shared with anyone


No matter where you are nationwide, we are here to help.

We have the resources and support to take on the largest insurance companies.

Contact us today for our nationwide service.

Contact Us
Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri
Nebraska Nevada New Hampshire New Jersey New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina
South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming