Tax General Business Insurance

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Plain and Simple: Maryland Tax Court Holds Insurance Company is Exempt from Corporate Income Taxes

Although taxpayers often complain that complying with the tax laws imposed by the numerous state and local taxing jurisdictions that exist in the United States is a burdensome process, many of these tax statutes also provide...more

IRS Proposes Regulations Directed To “Passive” Hedge Fund Foreign Insurance Entities

On April 24, 2015, the Internal Revenue Service proposed regulations directed to “situations in which a hedge fund establishes a purported foreign reinsurance company in order to defer and reduce the tax that otherwise would...more

Benefits of an Irrevocable Life Insurance Trust as Security for Support

Divorce or separation agreements often require one spouse to maintain life insurance as security for their support obligation. Attorneys often do not address the tax implications if the insured spouse owns the policy. ...more

IRS Proposes PFIC Regulations That Could Characterize Many Foreign Insurance Companies as PFICs

A mere 28 years after Congress enacted the tax rules governing passive foreign investment companies (“PFICs”), the Treasury Department and Internal Revenue Service have for the first time issued proposed regulations that...more

IRS Publishes Proposed Regulations for Hedge Fund Reinsurance Arrangements

In April 24’s Federal Register, the IRS released proposed regulations (REG-108214-15) to restrict when a foreign insurance company’s income can be excluded as passive income by giving a more strict definition for the “active...more

Treasury and the IRS Offer a New Take on the PFIC Active Insurance Exception

On April 23, Treasury and the IRS issued proposed regulations interpreting the active insurance exception under the passive foreign investment company (PFIC) rules. Although the release of the proposed regulations did not...more

One Down, One to Go: Illinois Senate Passes Captive Insurance Exemption to Illinois Self-Procurement Tax

On April 21, 2015, the Illinois Senate unanimously passed Senate Bill 1573, as amended. As we have previously covered, the amended Bill creates an exemption from the 3.5 percent self-procurement tax and 0.2 percent Surplus...more

IRS Releases Favorable Private Letter Ruling on “Taxable Annuity.”

On April 10, the Internal Revenue Service (IRS) released PLR 201515001 (Oct. 10, 2014), favorably addressing a “taxable annuity”—essentially, a deferred annuity contract supported, in part, by subaccounts, each of which...more

Irrevocable Life Insurance Trusts - Tax and Nontax Advantages

Creating an Irrevocable Life Insurance Trust (ILIT) can dramatically increase the liquidity of an individual’s estate and effectively leverage the value of the annual $14,000 per donee gift tax exclusion and the $5,430,000...more

Insurance Topics We Will Be Watching in 2015

With the first month of the year behind us, this report outlines major insurance topics that we will be watching throughout 2015. Forces, trends and events that we believe will affect regulation, transactions and...more

IRS Scrutinizes Captive Insurance

Every year the IRS issues a list of tax scams pertinent to that filing season. This list is commonly referred to as the (“Dirty Dozen”). The Dirty Dozen warns taxpayers of illegal tax avoidance schemes that can lead to...more

Focus: PI Insurance – Conformity Certification – New Rules

Many undertakings operating in the professional indemnity insurance sector traditionally offer policies covering the civil liability of certified chartered accountants and bookkeepers arising from the issue of conformity...more

Cayman Insurance Law Amendments Enhance Captive Flexibility

On January 16, 2015, the Cayman Islands published new insurance regulations affecting portfolio insurance companies (PICs). The regulations are designed to provide more flexibility to insurance companies incorporated as...more

FY 2016 Budget Tax Proposals Target Insurance Companies

On February 2, the Obama Administration released its fiscal year 2016 budget (FY 2016 Budget). The hallmarks of the FY 2016 Budget are proposals that would impose (i) a minimum tax on the current foreign earnings of U.S....more

Illinois Industrial Insured Self-Procurement Tax Guidance Announced

As we have previously covered in detail, at the end of its 2014 regular legislative session, the Illinois General Assembly enacted a multimillion dollar tax on Illinois companies using captive insurance arrangements. The law...more

Proposed Anti-Inversion Regulations Would Affect Foreign Insurers

For decades American companies have used so-called “corporate inversions” to lower their tax burdens on foreign-earned income. Typically, the American company is acquired by a foreign company located in a tax-favorable...more

Third Circuit Limits ERISA Fiduciary Liability

Former and current annuity holders sued John Hancock Life Insurance Company in New Jersey federal court several years ago, alleging that, as a service provider to their 401(k) plans, John Hancock was an ERISA fiduciary and...more

New Year, New Disclosures

On December 29, the Florida Department of Financial Services (FDFS) published Proposed Rule 69B-215.090 (the "Proposed Surrender Disclosure Rule") setting forth the disclosures required when a surrender of any cash value life...more

New FATCA requirements apply to U.S. and non-U.S. insurers and insurance brokers on January 1, 2015

New FATCA requirements that apply to U.S. and non-U.S. insurance brokers and insurance companies will take effect on January 1, 2015. Those requirements impose new information gathering and reporting rules when U.S. insurance...more

Unfinished Business: Illinois General Assembly Fails to Repeal Self-Procured Insurance Tax

Despite a strong effort by a coalition of opponents, efforts to repeal the new Illinois self-procured insurance tax law in the veto session of the Illinois General Assembly were unsuccessful. As a result, the law will take...more

U.K. Tribunal Finds Broker Alliance Does Not Fall Within Vat Exemption For Insurance-Related Services By Brokers And Agents

An upper tribunal in the United Kingdom has dismissed an appeal brought by Westinsure, an alliance of brokers formed to provide introductions and improve the business terms of its members, where Westinsure argued its services...more

Washington Supreme Court Narrows Efficacy of Late Notice Defense

Even when the claims in a lawsuit arguably fall within the coverage terms of the defendant’s liability insurance policy, the circumstances might suggest facts that would establish a defense to coverage. In that case, the...more

Policy Observer - September 2014

All Sums or Pro Rata: Did You Get the Coverage You Bought? In recent decades, liabilities stemming from long-term bodily injury or property damage—as from exposure to asbestos or contamination of the environment—have...more

The Waters of March -The Benefits of Owning Life Insurance within a Cascading Charitable Lead Annuity Trusts (CLATs)

...I recall hearing Bossa Nova as a ten year old at my neighbor’s house in the Panama Canal Zone – Sergio Mendes and Brazil 66. The Waters of March is one of many great songs written by Antonio Carlos Jobim and sung by Elis...more

Can We Talk? Providing Hedge Fund Managers with the Deferral of Carried Interest until Eternity

Overview - The recent passing of Joan Rivers not only requires us to pay tribute to one of the great comedic minds of the last forty-fifty years, but serves as a testimony to professional passion, perseverance and hard...more

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