The R Street Institute, a libertarian-leaning think tank in Washington, D.C., warned top Republican lawmakers this year not to go after a loophole used largely by foreign-based insurance companies. The provision allows them to avoid paying taxes on premiums collected from American consumers.

In a letter to Rep. Kevin Brady, R-Texas, and Sen. Orrin Hatch, R-Utah, the top two Republicans on the tax-writing committees, the think tank urged lawmakers not to change the tax rules, claiming such a move would choke “off the supply of internationally sourced risk-transfer capital.”

Any effort to change tax policy with respect to foreign insurers using reinsurance in Bermuda could also adversely impact disaster recovery efforts, especially “in light of Hurricanes Harvey, Irma, Maria and Nate, as well as the record-setting California wildfires,” the R Street letter further warned.

There’s a reason the letter almost perfectly echoes the arguments made by foreign insurers.

Metadata from the R Street letter shows the document was uploaded to the web by Brad Kading, the president and chief lobbyist of the Association of Bermuda Insurers and Reinsurers, a trade group that represents financial firms that utilize the reinsurance loophole.

David Bahr, a spokesperson for R Street, sent The Intercept a statement noting that his group has always been a member of a coalition effort that opposes “protectionist changes to the U.S. tax code that would serve to make insurance — particularly catastrophe reinsurance — less available and less affordable for U.S. consumers.”

“Through the coalition,” Bahr wrote, “we have worked with a number of foreign-based insurance and reinsurance companies, as well as domestic insurance buyers and other groups opposed to protectionist trade policy. Out of respect for the privacy of our donors, R Street do not disclose their identities except where they have chosen to do so. It is a matter of public record that R Street’s board of directors includes representation from both domestic and foreign-based insurance firms.”

Ian Adams, associate vice president of state affairs at the R Street Institute, told the Intercept that he had originally drafted the letter and sent a copy of the letter to Kading to be uploaded to the Coalition for Competitive Insurance Rates, an industry coalition working on the tax issue.

Adams says there is a reason the letter reflects arguments from the Bermuda tax lobby. He has worked closely with the industry coalition to draft talking points provided to the public. He further noted that metadata from the R Street website shows that the letter was created by his group and sent to Kading, and was published 18 minutes later by the Bermuda lobbyist.

Lobbyists routinely use think tanks, academics, trade associations, farmers, small businesses, and other third-party organizations to make requests to lawmakers on their behalf. A request to public officials may appear more credible if made through a trusted organization, rather than from an influence peddler.

The Association of Bermuda Insurers and Reinsurers count a number of major foreign insurance companies as members, including AXIS, Allied World Assurance, Fidelis, and Argo Group International Holdings. The organization did not respond to a request for comment.

The tax strategy is a significant benefit to foreign insurers because it allows them to buy reinsurance in Bermuda on premiums collected in the United States, thus deferring paying taxes because the reinsurance is deductible. The issue has divided the insurance industry because insurance companies based in the United States may not access this tax strategy, while foreign insurers are able to effectively defer their taxes.

The obscure tax rules that allow the reinsurance loophole have motivated entire insurance companies to relocate to Bermuda. In October, Assurant, a New York-based insurer that specializes in extended warranties and home insurance, announced a deal to acquire the Warranty Group, a Bermuda-based insurance company. The reverse merger — known as an inversion — allows Assurant to move its tax domicile to Bermuda, where the Warranty Group’s parent company is based, allowing the firm to take advantage of the loophole.

Hedge funds have also capitalized on a similar strategy. Sophisticated money managers have moved hundreds of millions of dollars to affiliated reinsurance companies in Bermuda, which in turn have invested the money in their affiliate hedge funds. By moving the money through Bermuda reinsurers, the hedge funds lower their tax bill.

Third Point Reinsurance, a reinsurance arm of Third Point, the hedge fund run by billionaire Daniel Loeb, is a member of the Association of Bermuda Insurers and Reinsurers.

The loophole has sparked a furious lobbying battle, with a number of lobbyists close to top GOP lawmakers retained to influence the the final tax bill. Lori Harju, Brady’s former chief of staff, has worked on behalf of Bermuda-based insurer Athena to influence the bill. And Barbara Angus, chief tax counsel on Brady’s staff, previously worked in the lobbying division of Ernst & Young. Her former colleagues have been hired by the Association of Bermuda Insurers and Reinsurers to lobby lawmakers on the issue.

The initial tax bill passed by the House of Representatives, though sold as a way to simplify the code and discourage offshore strategies, preserved the Bermuda reinsurance loophole. But details are still being hammered out, and the final text, which is expected to be published and debated in the coming days, may close or diminish the benefits of the Bermuda loophole.

Update: This post has been updated with comments from Ian Adams of the R Street Institute.