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Athene estimates slightly higher overall tax rate for 2018

Athene Holding Ltd. estimates that recently enacted federal tax reform will result in an overall rate for 2018 in the range of 14% to 15% for the company.

The federal tax legislation that lowered the corporate rate to 21% included a provision to impose an excise tax on premiums sent to affiliated companies domiciled outside the U.S.

Athene CFO Martin Klein during the company's fourth-quarter 2017 earnings conference call said that some uncertainty remains over how the provision will apply. Athene expects that it will apply to the net reinsurance settlements from its U.S. subsidiaries to its Bermuda subsidiary. Among the issues yet to be settled is whether the Base Erosion and Anti-Abuse, or BEAT, tax applies to net or gross payments, Klein said.

The tax rate changes had no material impact on Athene's statutory capital and risk-based capital ratios at year-end 2017, the CFO said. Depending on decisions by the NAIC, the lowered tax rate could result in a reduction in industry capital ratios, he said. Had the new corporate rate been in effect as of Dec. 31, 2017, the company's capital ratios would be up to 15% lower, Klein added.

Athene's stock price took a hit when tax reform negotiations incorporated language to impose a levy on premiums to offshore companies. Klein during the call said the company's combined tax rate has been 10% to 12%.

The new tax rate included a fourth-quarter benefit of $7 million due to a decrease in the company's deferred tax liabilities.