The North West Life Assurance Company of Canada - Page 49

                                               - 49 -                                                  

            may escape U.S. taxation on investment income attributable to                              
            their U.S. business.                                                                       
                  Respondent retained Richard E. Stewart, Richard S.L. Roddis,                         
            and Barbara D. Stewart of Stewart Economics, Inc.15 (Stewart), as                          
            expert witnesses to give their professional opinion as to the                              
            reasons and incentives Canadian life insurance companies have for                          
            holding certain assets in the United States and why the                                    
            investment income earned on those assets is not an inherently                              
            reliable measure of the investment income flowing from the branch                          
            operations. We have received into evidence their report.16                                 
            Stewart reviewed the history of the State regulations applying to                          
            foreign insurance companies, including the NAIC annual statement                           
            and the trust requirements for such companies.  The report agrees                          
            with respondent that NAIC form 1A is not an effective means by                             
            which to ascertain the net investment income that is effectively                           

            15Richard E. Stewart holds a degree from West Virginia                                     
            University and a law degree from Harvard Law School.  He is                                
            former Superintendent of Insurance of the State of New York and a                          
            former officer and director of The Chubb Group of Insurance                                
            Companies.  Richard S.L. Roddis holds a degree from San Diego                              
            University and a law degree from Boalt Hall School of Law at the                           
            University of California at Berkeley.  He is a former                                      
            Superintendent of Insurance of the State of California.                                    
            Barbara D. Stewart holds a bachelor's degree in economics and                              
            business administration from Beaver College.  She is a former                              
            corporate economist of the Chubb Group.                                                    
            16We have disregarded the Stewart report to the extent that                                
            it relies on State law of Washington for years not at issue.  The                          
            record does not indicate that petitioner operated in Michigan;                             
            we have also disregarded the report to the extent that it relies                           
            on Michigan State law.                                                                     




Page:  Previous  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  Next

Last modified: May 25, 2011