CART Act of 2025

The CART Act of 2025 establishes a new tax classification for "catastrophic risk transfer companies," which are special purpose insurers designed to handle large-scale, low-probability risks like natural disasters or major catastrophic events. These companies must derive at least 90% of their income from specific sources including investment income and reinsurance premiums from regulated insurers or government entities. The bill creates special tax rules requiring these companies to distribute at least 90% of their taxable income as dividends, with specific tax treatment for investors receiving these dividends. It also provides tax exemptions for certain dividends paid to foreign investors and prevents double taxation on reinsurance premiums.