Secure Family Futures Act: New Tax Rules for Insurance Companies on Debt and Losses After 2025

The Secure Family Futures Act of 2025 introduces targeted changes to the U.S. Internal Revenue Code, specifically adjusting how certain insurance companies handle taxes related to debt investments and capital losses. Starting after December 31, 2025, specific debt instruments like bonds held by these companies won't be treated as 'capital assets' (Section 2). Additionally, these 'applicable insurance companies' will get more time – 10 years instead of the standard timeframe – to carry over capital losses to offset future taxable income for losses incurred in tax years beginning after December 31, 2025 (Section 3).

So, what does this mean in practical terms? Changing the classification of debt instruments could alter how gains or losses on those investments are taxed, potentially allowing losses to offset a broader range of income, which can be advantageous for a company's tax bill. The extended 10-year carryover for capital losses gives these insurers a longer window to benefit financially from past investment downturns by reducing taxes owed in profitable years. The bill defines 'applicable insurance company' in a way that includes many standard insurers but carves out exceptions for certain smaller or specialized types. While these changes directly impact the financial operations and tax liabilities of qualifying insurance companies, the adjustments raise considerations about tax fairness across different industries and the potential effects on overall federal tax revenue.