Chubb Europe has become the latest insurance company to cry foul over Government proposals for taxing insurer reserves.

The American insurance giant believes it will be particularly hard hit as a provider of specialist lines insurance that has to make greater reserves than some of its rivals.

In a letter to Chancellor Gordon Brown, Chubb Europe's president, Jeol Aronchick wrote: "The discounting provision will impose a substantially increased tax burden on Chubb Europe that will negatively impact our operating results in the UK.

"We believe that such an increased tax liability is unjustified and will unfairly impact upon us due to the focus of our business on speciality lines."

The Government claims the chancellor's new proposals are aimed at stopping insurers from over-reserving.

Under the current regime, if an insurer reserves for £10m in losses over five years and the final payout is £8m, then the insurer has to pay tax on the £2m. Under Brown's proposed new system, that £2m will be subject to an interest calculation, which means an increase in insurer's costs.

Actuarial figures recently showed that insurers are likely to face a bill of £250m if Gordon Brown's proposals are passed.