News & Analysis as of

Captive Insurance Company

IRS Focuses Its Audit Priorities on Captive Insurance

by Blank Rome LLP on

The terms "captive insurance" and "federal income tax code" are anything but captivating. Yet, captive insurance has captivated the attention of the Internal Revenue Service ("IRS"), which has placed captive insurance on its...more

Can a Captive Insurance Company Help You Keep Your 8(a) Certification?

by PilieroMazza PLLC on

At the beginning of 2017, the Protecting Americans from Tax Hikes (“PATH”) Act went into effect. One of the changes implemented by the Act altered how small and medium-sized business owners can use captive insurance companies...more

Tennessee Revises Rules Regarding Captive Insurance Companies

by Carlton Fields on

The Tennessee Department of Commerce and Insurance has substantially revised its rules for captive insurance companies. Significant changes include...more

Tax Court Disallows Deductions For Payments To Captive Insurance Company

by Carlton Fields on

A husband and wife who paid $1.54 million in premiums to their captive insurance company and $720,000 in premiums to another insurer over two years, almost all of which ended up back in their bank accounts, have had their tax...more

Global In-House Centers in India, v2.0

GICs in India are evolving from cost-saving platforms into Innovation Centers for emerging digital technologies that can provide a competitive advantage. Recent years have seen a resurgence of interest in GICs in India...more

InsureTech Connect 2017 Panel Discussion: Maximizing Profits via Products and Alternative Business Model Innovation

by Mintz Levin on

After being in the insurance industry for several decades in a variety of roles, I frequently get asked which insurtechs I think are going to be successful. In sum, I believe the insurtechs best positioned for success are...more

Takeaways from the Tax Court's First Micro-Captive Insurance Ruling

by Holland & Knight LLP on

• The U.S. Tax Court recently ruled in Avrahami v. Commissioner, the first litigated Tax Court case involving an 831(b) captive insurance company. • The Tax Court held that two of the key factors that define "insurance"...more

Delaware Governor Signs Law Creating Streamlined And Inexpensive Regulatory Regime For Dormant Captive Insurance Companies

by Carlton Fields on

The bill defines a dormant captive insurance company as one that (1) did not contract for any direct premium or reinsurance premium for a full calendar year, (2) is not obligated as an insurance company under any contract of...more

Court Dismisses Suit By Rehabilitator For PMI Insurer Against Captive Reinsurer And Affiliated Bank

by Carlton Fields on

A district judge in the Northern District of Illinois has dismissed all claims brought by the Illinois Director of Insurance, acting as rehabilitator for Triad Guaranty Insurance Corporation and Triad Guaranty Assurance...more

Lender-Affiliated Captive Reinsurer Obtains Dismissal Of Mortgage Insurance Lawsuit Brought By Illinois Director Of Insurance

by Carlton Fields on

The suit arose out of an arrangement where lenders would refer borrowers to (now-defunct) Triad Guaranty Insurance Company (Triad) to obtain private mortgage insurance. The lender-affiliated captive insurance company would...more

Summer 2017 Sees Hot Developments in Regulating Insurer Capital and Life Reserve Financing

At the recent National Association of Insurance Commissioners (NAIC) Summer National Meeting held in Philadelphia from August 6, 2017, to August 9, 2017, the NAIC continued its work on group capital calculation standards,...more

Client Alert: Avrahami v. Commissioner: An Important Ruling on Microcaptive Structures

While many were captivated by the solar eclipse on August 21st, the US Tax Court, in Avrahami v. Commissioner, shed judicial light on the tax treatment of what is known as a “microcaptive” insurance company. More...more

Tax Court Issues Opinion Striking Down Captive Insurance Arrangement

by Fox Rothschild LLP on

The Tax Court has issued its long-awaited decision addressing captive insurance arrangements. In Avrahami v. Commissioner, 149 T.C. No. 7 (2017), the Tax Court held that payments made from a number of businesses owned by the...more

Tax Court Decides First Micro Captive Case

On August 21, 2017, the Tax Court issued its opinion in two companion cases Benyamin Avrahami and Orna Avrahami v. Commissioner, and Feedback Insurance Company, Ltd. v. Commissioner, 149 T.C. No. 7, holding against the...more

Georgia Revamps Law Governing Captive Insurance Companies

by Carlton Fields on

Significant changes to Georgia law governing captive insurance companies took effect on July 1, 2017. The changes relate to the permitted corporate structure of captive insurance companies, new restrictions on risks that may...more

Captive Insurance Update | Issue No. 1 | 2017 - A summary of state and federal developments in the captive insurance industry

Changes at the Top - Republican Phil Scott was elected Governor of Vermont in November 2016, having previously served as Lieutenant Governor for six years. Governor Scott has re-appointed Michael Pieciak to serve as the...more

Montana Enacts Captive Insurance Law Impacting Reciprocal And Dormant Insurers

by Carlton Fields on

On May 4, 2017 Montana enacted a new law that will remove the requirement that reciprocal captive insurers have 25 or more persons domiciled in Montana. The law also permits captive insurers to go into dormancy. The...more

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

by Womble Bond Dickinson on

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

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