The proposed House tax-reform bill could mean boosted earnings for property and casualty companies.

The bill calls for a reduction in the corporate tax rate from 35% to 20%. That could lift earnings of US P&C companies by an average of 14%, according to an analysis by Morgan Stanley. However, the bill’s provisions on excise tax and intercompany debt could deal a blow to global P&C companies.

The bill’s excise provision calls for a 20% tax on payments to foreign affiliates, according to a report by Intelligent Insurer. Under the provision, companies can elect to pay US tax on the foreign earnings rather than gross receipts – but that will be a negative for foreign reinsurers, according to the Morgan Stanley analysis.

The intercompany debt provision may also result in a tax hike for global P&C companies. The proposed bill limits the deduction of interest by domestic subsidiaries of international groups, much like proposed Treasury regulations limiting “earnings stripping,” Intelligent Insurer reported.

Earnings stripping lowers taxable income at US subsidiaries of foreign companies through related party debt between the US arms and their foreign parents. If earnings stripping is limited, it could increase the effective tax rate for global companies like Aon and Marsh & McLennan Companies, according to Intelligent Insurer.