CIC urges overthrow of new IRS 831(b) rule
CIC Services is calling on the US Congress to act swiftly to overturn a new IRS rule that threatens the ability of small and mid-sized businesses to manage risk through captive insurance.
According to CIC the regulation, finalised in January 2024, severely restricts IRC Section 831(b), a long-standing provision designed to help businesses affordably and efficiently protect themselves from financial risk.
The new rule comes at a time when businesses are already facing rising commercial insurance premiums, higher deductibles, and shrinking coverage options. If it stands, many businesses could be left without viable alternatives for protecting against financial uncertainty, CIC claimed.
“Congress enacted the 831(b) election nearly 40 years ago to give small and mid-sized businesses a way to manage risk affordably, yet this new IRS rule severely undermines that purpose,” said Sean King, chief executive of CIC Services. “Congress has a clear opportunity to act now, overturn this rule, and protect businesses from unnecessary financial hardship.”
Under the Congressional Review Act (CRA), Congress has a limited window to introduce a resolution to overturn this regulation. CIC Services urges lawmakers to take immediate action before it’s too late.
CIC Services is calling on senators and representatives to:
• Introduce a joint resolution under the CRA to disapprove of the IRS rule.
• Recognise the economic harm this regulation will cause small businesses in their districts.
• Stand up for fair and reasonable insurance options for American businesses.
While the responsibility to act lies with Congress, business owners can make a difference by urging their elected representatives to support a CRA resolution, CIC said, adding that business owners are encouraged to:
• Contact their members of Congress and explain how this rule will impact their business.
• Share their personal experiences to highlight the real-world consequences of losing access to captive insurance.
• Engage in advocacy efforts by working with industry groups and staying informed.
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