From: Captive International
The Internal Revenue Service’s (IRS) move to force the Delaware Department of Insurance to hand over information related to a number of micro-captives represents a worrying development for the industry, if it sets the precedent of the federal government, as opposed to state governments, taking a stance on insurance regulation.
That was one of the themes that emerged in a panel discussion called ‘Hot Topics in Captive Insurance’, which took place at the Captive Insurance Companies Association’s (CICA) annual conference, taking place in Tucson this week (March 6-8).
The panel of experienced industry veterans comprised: Joel Chansky, Consulting Actuary, Milliman; Nancy Gray, Regional Managing Director, Americas, Aon; Dave Provost, Deputy Commissioner, Captive Insurance, Vermont Department of Financial Regulation; and Paul Shimomoto, Partner, Goodsill Anderson Quinn & Stifel, who also moderated the session.
The group had an interactive discussion on current hot topics impacting the captive insurance industry. They examined current developments in captive regulation, discussed new trends and other key issues facing the industry. They also discussed what is driving the increased interest in captives and threats facing the industry.
In terms of the IRS case, Shimomoto noted that, while the case was still going through the courts, it appeared the move was part of the IRS’s wider strategy of targeting micro captives, also known as 831(b)s, which remain on the IRS’s so-called ‘dirty dozen’ list of tax scams. Delaware has a number of micro captives registered there.