Captive Insurance Company

News & Analysis as of

Ohio Joins Captive Insurance Market

Governor John Kasich signed Ohio House Bill 117 into law on June 17, 2014, becoming the 31st state to join the captive market. The legislation allows Ohio-domiciled companies to form their own “captive” insurance companies,...more

Vermont Amends Its Captive Insurer Law

Vermont has amended its captive insurer statute (H. 563) to permit a company to elect a “dormant captive insurance company” status for a period of five years (renewable) if it meets certain criteria: (1) unimpaired, paid-in...more

IRS Rules Captive Reinsurance Arrangement Involving Retiree Medical Benefits Qualifies as Insurance for Federal Tax Purposes

On May 18, 2014, the Internal Revenue Service (IRS) ruled that an employer’s wholly owned captive insurance subsidiary could reinsure the employer’s retiree medical benefit risks and still qualify as insurance for federal tax...more

Connecticut Amends Law Concerning Captive Insurers

Connecticut has amended its law concerning captive insurers doing business in the state to include, in part, a new provision on how foreign captive insurers can become Connecticut domestic companies and revisions on how...more

Further Guidance for Employers Providing Benefits Through Captives

On May 8, 2014, the IRS released Rev. Rul. 2014-15 (available here). The ruling provides guidance to the growing number of employers electing to insure or re-insure employee benefits through captive insurance arrangement. The...more

Whose Risk Is It Anyway? New Revenue Ruling Provides Guidance for Employee Benefits Captives

On May 8, the IRS issued Rev. Rul. 2014-15, 2014-22 I.R.B. 1, which provides guidance in the rapidly expanding area of insuring or reinsuring employee benefits with captives. ...more

New York Budget Legislation

On March 31, 2014, New York State Governor Andrew Cuomo signed into law the 2014-2015 New York State Budget (Budget), which results in the most significant overhaul of New York’s franchise tax in decades. The Budget brings...more

Lenders' risk: Who really owns the collateral?

Unlike real estate transactions where a lender can obtain title insurance, secured lenders are often relying upon the representations and warranties in their loan agreement and the borrower’s audited financial statements, if...more

Report to NAIC on Captives: The Controversy About Principle-Based Reserves and Captives Continues

The use by life insurance companies of captive reinsurance companies to finance XXX and AXXX reserves has been a significant and contentious issue in recent years. Some members of the National Association of Insurance...more

Federal Court Refuses To Dismiss Plaintiffs’ Putative Class Action In Captive Reinsurance Case

On their third attempt to state a claim for mortgage services fraud pursuant to the Real Estate Services Settlement and Procedures Act (“RESPA”), Plaintiffs in a putative class action overcame defendants’ motion to dismiss on...more

Finding Love in All of the “Right” Places – Part 1: Deferred Compensation Opportunities within Captive Insurance Companies -...

Overview - In my last article, I produced an overview of closely held insurance companies aka captive insurance companies and their excellent tax benefits for businesses. Separate and apart from the risk management...more

Held Captive! The Closely Held Insurance Company - An Integrated Tax and Risk Management Solution

Overview - Captive or closely held insurance companies have been around a long time, at least fifty or more years. For most of their existence, captive insurance companies lived in relative anonymity and were mostly in...more

Legal Alert: New York Tax Reform to Impact Captive Insurance Companies

In January, New York Governor Andrew Cuomo proposed broad corporate tax reform in his budget bill, which is currently winding its way through the legislature. The most significant proposal is a shift from a separate entity...more

New Dutch transfer pricing decree: incorporating case law, bringing clarity

The Dutch Ministry of Finance has released a new transfer pricing Decree that is already in effect. The New Decree, announced in late November, supersedes two earlier Decrees, that of 30 March 2001 (IFZ 2001/295) and...more

Global Financial Market Insight - November 2013

Welcome - With recovery in financial markets starting to take hold it is an exciting time to launch our Global Financial Markets Insight. The purpose of our new quarterly is to help guide new and experienced users of...more

FHFA Announces Ban for Reimbursement of Expenses For Captive Reinsurance Arrangements

On November 5, 2013, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the GSEs) will no longer reimburse their participating servicers for expenses arising out of captive reinsurance...more

Companies Increasingly Look To Captive Insurance

Companies seeking an alternative to traditional risk management approaches are increasingly turning to the captive insurance market, especially for recurring and foreseeable losses. As most commonly understood, the...more

Financial Institutions Practice - Quarterly Review (October 2013)

In This Issue: - “The Upfront Costs of Compliance Are Looking More Like a Bargain Every Day” and “How to Minimise the Risk of Insider Trading and Leaking of Material Information” (October-December), Risk &...more

Illinois Appellate Court Respects Characterization of Captive Insurance Company

In Wendy’s International, Inc. v. Brian Hamer, decided earlier this week, the Illinois Appellate Court found that Taxpayer had met its burden and proved that its subsidiary insurance company was a bona fide insurance company...more

Corporate & Securities Law Alert: September 2013 - Captive Insurance: A Niche for the Middle Market

With insurance premiums on the rise and the uncertain state of the federal tax system, middle market business owners may be looking for a source of stability that allocates the risks associated with operations. A “small”...more

Reinsurance Newsletter - September 2013: More Cases On Captive Reinsurance Mortgage Insurance

White v. The PNC Fin. Servs. Grp., Inc., No. 11-7928, 2013 U.S. Dist. LEXIS 86650 (E.D. Pa. Jun. 20, 2013). In this case, plaintiffs accused one of the defendant banks and its affiliated reinsurer of carrying out an...more

State, national and international insurance regulatory activity reflects steps toward more regulation and heightened scrutiny

The past few weeks have seen a flurry of insurance regulatory activity at the federal, state and international level. Individually these developments are noteworthy; taken together, they evidence the depth and breadth of...more

Regulators Shining a Light on "Shadow Insurance"

A highly critical report issued by the New York State Department of Financial Services (DFS) on June 11, 2013, found that almost a quarter of New York life insurers were diverting a total of $48 billion of their policies to...more

Texas Opens Door to Captive Insurance Options

Captive insurance companies may now be domiciled in Texas under a law signed by Gov. Rick Perry on Monday. Texas joins more than 30 other states that permit the formation and operation of various types of captive insurance...more

Patton Boggs Reinsurance Newsletter - June 2013: Pennsylvania Federal Court Finds Basis for Equitable Tolling and Denies Cedent...

Riddle v. Bank of Am. Corp., Case No. 12-1740 2013 U.S. Dist. LEXIS 52091, 2013 WL 1482668 (E.D. Pa. Apr. 11, 2013). An outgrowth of the residential housing bubble was the creation of captive mortgage bank reinsurers. ...more

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