Aon Risk Solutions has launched a capital advisory unit designed to assist re/insurers, Lloyd's syndicates and captive insurance companies with their capital optimisation.
Clients that have parent companies with headquarters or operating units in Washington state should consult their tax professionals following the settlement of the case involving Microsoft’s Arizona-based captive being issued a cease & desist letter, warns JLT Insurance Management (JLT IM).
If the IRS continues to gain victories against small captives in the US Tax Court, it may be emboldened to target larger captives, according to Charles “Chaz” Lavelle, partner at Bingham Greenebaum Doll, speaking to Captive International at the VCIA annual conference.
Tax reform is affecting every corporation in the US and the captive industry is no different. The Base Erosion Anti-Abuse Tax (BEAT) provisions in particular may drive captives to redomicile onshore.
Upcoming US Tax Court cases - Caylor, Wilson, and Syzygy Insurance - have likely been selected by the IRS to target deficient captive models; but the outcomes of these cases should not hurt growth in the legitimate captive market.
Following the outcomes of Avrahami and more recently Reserve Mechanical, upcoming US Tax Court cases - Caylor v Commissioner, Wilson v Commissioner and Syzygy Insurance v Commissioner - are likely to suffer similar fates, spelling further IRS victories.
Capstone Associated Services, the operator of Reserve Mechanical's risk pool entity Pool Re Insurance, has issued a second statement on the US Tax Court case following the opinion issued by Judge Kathleen Kerrigan.
As the dust settles on the US Tax Court's latest ruling against a small captive, the captive insurance industry is still examining what the Reserve Mechanical Corp v Commissioner case means for the sector.
In a decision that may place captive insurance companies under further scrutiny, the US Tax Court has ruled in favour of the IRS in the case of Reserve Mechanical Corp v Commissioner.
Tax reform is generally positive for US-domiciled captives and a mixed bag for offshore captives, however it has not affected any credit ratings, according to an AM Best briefing.