Captive Insurance Company

News & Analysis as of

NAIC Panel Approval May Pave Way Towards Elimination of Variable Annuity Captives

A panel of the National Association of Insurance Commissioners (“NAIC”) recently approved a preliminary framework that may pave the way towards eliminating variable annuities captive reinsurance transactions. The framework,...more

Tennessee Issues Bulletin Re Reinsurance Ceded to Unauthorized Reinsurers by Tennessee Captives

The Tennessee Department of Commerce and Insurance recently issued a bulletin providing guidance to the Tennessee captive insurance industry on credit for reinsurance obtained by Tennessee captives from unauthorized...more

The Prospect for a Legislative Fix in the Case of Certain Promoters Using Micro Captives Deemed Abusive by the IRS

Despite a considerable reduction in budget and personnel, the Internal Revenue Service announced earlier this year that it would devote considerable time and effort to crack down on what it views as widespread abusive...more

FIO Issues 2015 Annual Report

Last month, the Federal Insurance Office (“FIO”) issued its Annual Report for 2015. The Report discusses many financial consumer protection and regulatory issues, both domestic and international, relating to the business of...more

IREG Update - October 2015 #2

Hot Topic - The FIO's criticism of state regulators regarding captive reinsurance framework - The Federal Insurance Office in its September 2015 "Annual Report on the Insurance Industry" criticizes state insurance...more

NAIC Proposes Changes to Life Insurer Disclosure Requirements and Treatment of Investment Affiliates

This month, the NAIC set forth a variety of proposals relating to changes risk-based capital (“RBC”) requirements, as well as treatment of investment affiliates. In particular, the NAIC seeks to require life insurers to...more

Phantom Injury Dooms “Shadow Insurance” Case

A recent federal district court decision dismissing a putative class action complaint against AXA Equitable Life Insurance Company may portend trouble for plaintiffs pursuing a number of similar so-called "shadow insurance"...more

State Data Breach Notification Requirements Specifically Applicable to Insurers

Almost all U.S. states and territories have enacted breach notification laws requiring private and/or government entities to notify individuals when their personal information is compromised....more

The Practical Need for Managers of Micro Captives and the Allure of 'Off Label' Uses

Every tax season, the Internal Revenue Service releases a “Dirty Dozen” list of schemes that it considers abusive and widespread enough to present a systemic threat to its enforcement of the tax laws. This year’s list...more

Wealth Management Update - September 2015

September Interest Rates for GRATs, Sales to Defective Grantor Trusts, Intra-Family Loans and Split Interest Charitable Trusts - The September § 7520 rate for use with estate planning techniques such as CRTs, CLTs,...more

Texas Amends Captive Insurance Regulation

Governor Greg Abbott of Texas has recently signed into law amendments to the Texas Insurance Code broadening the authority of captives. This law is effective as of September 1, 2015. There are three amendments in this...more

Insurance News, Summer 2015

The U.S. Senate Commerce Committee asked Michael Menapace to testify as an expert witness at a hearing called by the Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security entitled, "Examining the...more

Real Property, Financial Services & Title Insurance Update: Weeks Ending August 21 & 28 , 2015

Foreclosure/Statute of Limitations: statute of limitations did not bar foreclosure action even though filed more than five years after breach and acceleration of note upon which previous foreclosure action that had been...more

NAIC Summer 2015 National Meeting (A)XXX Developments and Key Takeaways

A number of important developments in the regulation of (A)XXX reserve financing transactions ((A)XXX transactions) emerged during the NAIC Summer 2015 National Meeting (Summer Meeting). Our roadmap through the NAIC’s...more

PHH Wins Stay of $109M CFPB Enforcement Penalty

On August 5, 2015, PHH Corp. (“PHH”) won a stay of the $109M penalty handed down by Consumer Financial Protection Bureau (“CFPB”) director Rich Cordray. Cordray’s aggressive legal reasoning and the harsh penalties he imposed,...more

Federal Court Dismisses Putative Class Action Accusing Life Insurer Of Failing To Disclose “Shadow Insurance”

Plaintiffs alleged that AXA Equitable Life Insurance Company violated New York insurance law prohibiting misrepresentations by insurers of their financial condition, because AXA had not disclosed “shadow transactions” in its...more

Standing in the Shoes or Freeing Evil Zombies? The Public Policy of Applying the In Pari Delicto Defense to Actions Brought by a...

In pari delicto is an equitable defense asserted when a defendant claims that a plaintiff is equally at fault for the wrong that has befallen him. The doctrine is “rooted in the common-law notion that a plaintiff’s recovery...more

CFPB Enforces RESPA in its First Appellate Decision of the Director

In the first appeal of an administrative enforcement proceeding before the Consumer Financial Protection Bureau (“Bureau”), the administrative law judge (ALJ) concluded that PHH Corporation, a mortgage lender, referred...more

Legislation Reintroduced to Clarify Application of NRRA to Captives

In an attempt to add clarity to the issue, Senators Lindsey Graham (R-SC) and Patrick Leahy (D-VT) have reintroduced proposed legislation that would exclude captive insurance companies from the coverage of the relevant...more

IRS Targets Captive Insurance Companies Owned by Closely-Held and Middle Market Companies

In February 2015, the IRS added certain small or “micro” captive insurance companies to its “Dirty Dozen” list of abusive tax scams for the 2015 filing season. In response to what it sees as an abuse involving a...more

Special Focus: What The Insurance Industry Should Know About The IRS’s Campaign Against “Abusive” Micro Captives

Though in the midst of a stifling budget and personnel reduction, the United States Internal Revenue Service (“IRS”) recently announced an increased effort to curb what it sees as widespread abusive applications of so-called...more

Expect Focus - ONLINE HEALTH CARE: NOT SO FAST Telemedicine Hits A Few Speed Bumps, Volume II, Spring 2015

In This Issue: - IN THE SPOTLIGHT • Risky Business: Common Cyber Security Risks, Expensive Consequences - LIFE INSURANCE • Ninth Circuit Finds Bonus Indexed Annuity Delivers Exactly...more

Stretched for Resources, the IRS Sets Its Sights on Small Captive Insurers

A "captive" insurance company is an insurer formed for the limited purpose of insuring the risks of its non-insurer owner or owners. A captive can be an effective risk-management tool, especially for costly or unconventional...more

Focus on Tax Strategies & Developments - June 2015

In This Issue: - Distinguishing Between Captive Insurance and Related Party Derivatives: Chief Counsel Advice Memorandum 201511021 - Achieving Tax-Free ‘Rollover’ Treatment for Certain Shareholders in Acquisition of...more

Statutory Accounting Fraud Under RICO

Echoing New York’s regulatory criticism concerning the use of captive reinsurers and similar allegations in recent class actions filed against several New York life insurers, an annuity contract owner has filed a putative...more

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