News & Analysis as of

Captive Insurance Company

The Rise of the Group Health Insurance Captive

With its “employer mandate”—i.e., the requirement that applicable large employers make an offer of group health coverage to substantially all full-time employees or face the prospect of a penalty—the Affordable Care Act (ACA)...more

The future of Hong Kong's insurance industry – New focus on reinsurance and captives?

by Hogan Lovells on

The Hong Kong Financial Services Development Council, an advisory body to the government, has recently released a report on the Hong Kong insurance sector. Its key recommendations are...more

Arkansas Revises Regulation Of Captive Insurance Companies To Create Incorporated Protected Cells And Dormant Captive Insurance...

by Carlton Fields on

Arkansas has amended its statutory regulation of captive insurance companies in two significant ways. First, following the lead of several other states and foreign jurisdictions, the amendment provides for the creation of...more

IRS Dirty Dozen for 2017, Tax Shelters, and Captive Insurance: Attacking Past Problems Using a Voluntary Disclosure Strategy

by Varnum LLP on

The IRS summarized its annual "Dirty Dozen" List of Tax Scams for 2017 in February. Practitioners and taxpayers should pay particular attention. The IRS is broadcasting their playbook. This list includes two principal types...more

LB&I Increases Scrutiny of Section 831(b) “Micro-captive” Insurance Companies

The Large Business and International (LB&I) Division of the Internal Revenue Service (IRS) announced its first 13 issue-based campaigns on January 31, 2017. As discussed in a prior Eversheds Sutherland Legal Alert, these...more

Second Circuit policyholder lawsuits challenging captive reinsurance disclosures

by Dentons on

On February 23, 2017, the United States Court of Appeals for the Second Circuit affirmed the rulings of several US district courts, shutting down a series of policyholder class actions that had been filed against Metropolitan...more

Client Alert: Captive Insurance on 2017 IRS “Dirty Dozen” Listing

For the third consecutive year, “abusive micro-captives” make an appearance on the IRS’ annual “Dirty Dozen” list of tax scams in 2017. Last year’s information release on abusive tax shelters, found in IR-2016-025, included...more

Bermuda – Proactively Seeking to Grow its Influence as an Off-Shore Investment Jurisdiction

Bermuda has long been a favorite jurisdiction of captive insurance companies and insurance-linked investment funds. More than 70% of the $25 billion in global insurance-linked securities (ILS) volume is listed on the Bermuda...more

Lawsuit filed to set aside IRS Notice 2016-66

Two months ago, without any prior warning or public notice, the IRS issued Notice 2016-66 which defined a number of common captive insurance transactions as “transactions of interest.” The Notice is limited to captive...more

Employee Benefits Developments - December 2016

by Hodgson Russ LLP on

The Employee Benefits practice group is pleased to present the Benefits Developments Newsletter for the month of December, 2016. Certain Captive Arrangements Are No Longer Under the Radar - Notice 2016-66, released...more

Court Tosses Time-Barred Rico Claims Alleging Captive Reinsurance Kickback Scheme

by Carlton Fields on

Plaintiffs asserted class claims for RICO violations based on allegations that Bank of America referred borrowers to private mortgage insurance providers in exchange for kickbacks, funneled through a captive reinsurance...more

IRS Treats Captives With Section 831(B) Elections As “Transactions Of Interest”

by Carlton Fields on

On the heels of Congress’ amendments last year to Section 831(b) of the Internal Revenue Code to curb perceived abusive use of so-called “micro” captive insurance companies, the IRS recently issued Notice 2016-66 officially...more

Captive Insurance - Looming IRS Reporting Deadline

Many businesses have been caught off guard by a recent Internal Revenue Service (IRS) notice that implicates a popular and commonly-used structure to manage risk. The notice employs a broad net and a short deadline, and...more

Captive Insurance Arrangements Taking Advantage of Section 831(b) Election May Be Required to Report to the IRS

by Locke Lord LLP on

The Internal Revenue Service on November 1, 2016 issued Notice 2016-66 (the Notice) requiring information reporting with respect to certain insurance or reinsurance transactions (often referred to as micro-captive...more

Urgent Captive Insurance Alert: IRS Lists 831(b) Micro-Captives as “Transaction of Interest”

by Tucker Arensberg, P.C. on

On November 1, 2016, via Notice 2016-66 (2017-47 IRB) (link to notice), the Treasury Department and IRS declared certain captive insurance transactions under Code section 831(b) as “transactions of interest.” Commonly...more

FIO Annual Report On The Insurance Industry

by Carlton Fields on

In September, the Federal Insurance Office (“FIO”) issued its Annual Report on the Insurance Industry for 2015, including its “outlook” for 2016 based upon results reported through June 30, 2016....more

Court Compels Arbitration To Determine The Arbitrability Of Reinsurance Dispute With Captive Insurance Company

by Carlton Fields on

In a suit by an auto body company against a captive insurance company for rescission of certain workers compensation reinsurance participation agreements, for disgorgement of $70,000 paid thereunder, and for fraud, breach of...more

Florida Open for Captive Insurance Business

by Holland & Knight LLP on

After several decades, Florida is back in the business of licensing captive insurance companies. On Aug. 11, 2016, the Florida Office of Insurance Regulation issued a license to a nonprofit Florida corporation, pursuant to...more

Alabama Amends Captive Insurers Act

by Carlton Fields on

On April 26, 2016, Alabama Governor Robert J. Bentley approved House Bill No. 270, which revised Alabama’s Captive Insurers Act. The revised Captive Insurers Act went into effect on July 1, 2016, and included amendments to...more

New Wave of COI Rate Increase Lawsuits Hits the Industry

by Carlton Fields on

Historically, increases to cost of insurance (COI) rates on universal life (UL) policies have been met with legal challenges from policyholders, and sometimes, regulatory opposition spurred by policyholder complaints. The...more

2016 Captive Insurance Update | Issue 2 | 2016

by Downs Rachlin Martin PLLC on

Governor Peter Shumlin (D-Vt.) is not running for re-election this fall, so Vermont will have a new governor in January 2017. In addition, the Commissioner of the Vermont Department of Financial Regulation (DFR), Susan...more

Court Distinguishes Between Claims For Relief And Affirmative Defenses In Denying Rehearing Of Order Compelling Arbitration

by Carlton Fields on

On May 11, 2016 we reported on a dispute between certain captive insurance administrative service providers (Capstone) against various defendants concerning the rights to certain intellectual property related to a captive...more

SDNY Determines Commissioner Of Insurance’s Report On Captive Insurer Is Not Privileged Under Montana Law

by Carlton Fields on

In a case of first impression, the Southern District of New York determined Montana Code § 33-28-108(3) did not mandate the Montana Commissioner of Insurance’s report on a captive insurer was privileged. The Code provision...more

New York State Denies Taxpayer's Insurance (Deduction) Claim - Tax Update Volume 2016, Issue 1

by Pepper Hamilton LLP on

Captive insurance arrangements, in New York and in certain other states, are often dependent on the federal treatment of the relationship as insurance for federal income tax purposes. A recent New York state...more

Recent Alabama Tax Developments

The Alabama Legislature adjourned sine die on May 4 bringing the 2016 Regular Session to an end. The 2017 Regular Session is scheduled to begin in February and there have been reports of a potential special session later in...more

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