So You Think You Know the Law
November 2018
True or False? The term “insurance” is defined in the Internal Revenue Code. FALSETrue or False? A “pure captive” insurer is one that insures only risks of companies related to it by ownership. TRUETrue or False? Like any insurer, a “microcaptive” pays taxes on premium received. FALSETrue or False? If an insured’s captive program is determined to not be insurance, nonetheless the premiums are deductible business expenses. FALSETrue or False? A captive insurer must be able to demonstrate risk-shifting, risk-distribution, and insurance risk, and must meet “commonly accepted notions of insurance.” TRUEPlease Note : This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.