Captive Insurance Tax Summit - Chicago

Chicago, IL

Price: $1395

Year-End Tax Pass

Fulfill all of your remaining CPE/CLE credits with entry to an unlimited number of upcoming Bloomberg BNA tax seminars and webinars in 2016 for less than the price of two seminars.

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A two-day conference with live group instruction featuring a comprehensive update on the legal, tax and financial aspects of the captive insurance industry today.

We respectfully ask IRS representatives and staff not to register for this event.

Overview of Topics to be Covered:

• Review of business reasons for utilizing an insurance affiliate
• Onshore and offshore captive tax and regulatory considerations
• Evolution of federal taxation of captives
• And more!

All paid attendees will receive the Bloomberg BNA Portfolio:  
U.S. Income Taxation of International Insurance Activities #931 (a $400 value)

*One Portfolio per paid attendee. Quantities are limited.

Recent financial turmoil marks the likely end of a “soft” insurance market. Meanwhile, the captive insurance industry continues to grow exponentially, with scores of new captives formed onshore and offshore last year. Concurrently, many companies are exploring more intensive use of their existing captives, whether individually or as part of a group, to contain their escalating cost of risk and to take advantage of employee benefits self-insurance opportunities. In addition, closely held businesses are creating captives to achieve tax advantaged family wealth transfer goals. This conference will provide you and your company with key tax, legal and regulatory information on structuring, implementing and operating your captive program. Both single parent and group/association captive arrangements, whether onshore or offshore, will be analyzed. Recent IRS pronouncements will be dissected. In particular, IRS federal excise tax and cell captive guidance, the validity of Rev. Rul. 2005-40, limiting insurance tax treatment in single policyholder situations, and the “event risk” IRS requirement of Rev. Rul. 2007-47 will be scrutinized. Differing taxpayer and IRS interpretations of risk distribution, including the need for “fortity” and “homogeneity” will be considered. Various sessions will address the major tax and non-tax advantages, including access to more efficient reinsurance markets, enhanced control over cash flows and investments, as well as promotion of a coordinated focus on proactive risk management and loss control. The parameters of developing a well structured captive insurance program to facilitate acceleration of premium tax deductibility from the time claim payments are made to the time premium expenses are incurred as well as other benefits will be discussed.

This conference is intended for: executive vice presidents, senior vice presidents, CFO’s, financial controllers, controllers, comptrollers, treasurers, assistant treasurers and secretaries, directors, corporate tax professionals, consulting tax professionals, corporate strategic planners, tax lawyers, legal counsel, lenders, bankers, CPAs, offshore and domestic service providers. No prerequisites/advance preparation is necessary for this basic to intermediate level conference. This program is transitional which is appropriate for newly admitted attorneys.



7:30 AM Registration and Continental Breakfast

8:00 AM Chairpersons’ Welcome & Opening Remarks

8:15 AM Review of Business Reasons for Utilizing an Insurance Affiliate
• Internal risk financing/profit center opportunity
• Claims, defense and administrative cost reduction
• Access to reinsurance
• Employee benefits and terrorism coverage
• Global based risk distribution

9:15 AM Evolution of Federal Taxation of Captives
• Clash of fundamental tax concepts
• 1941 U.S. Supreme Court LeGierse – case
• First wave of cases – IRS victories
• Second wave of cases – taxpayer victories
• IRS limited concessions and safe harbors
• Today – the third wave of cases

9:45 AM Potential Tax Benefits of an Insurance Affiliate
• Acceleration of risk funding deductions
• Premium and insurance reserves deductibility
• Unrelated business – types and amounts
• Brother/sister risks – structures avoiding risk concentration
• Mix of shareholders/insureds
• Group captives and risk distribution in cell and series structures
• Evaluation of IRS guidance vs. case law definitions

10:30 AM Break for Refreshments

10:45 AM Onshore Captive Tax and Regulatory Considerations
• Key onshore insurance company tax considerations
• Loss and unearned premium reserve deductions
• Stock, mutual or reciprocal format for optimal tax results
• Regulatory concerns and basics of liability risk retention groups

11:30 AM Offshore Captive Tax and Regulatory Considerations
• Subpart F treatment of insurance income
• Related Person Insurance Income (RPPI)
• Passive Foreign Investment Company (PFIC) rules
• When and how to make an IRC §953(d) onshore tax election
• Avoidance of a U.S. trade or business
• Overview of anti-tax haven and foreign account initiatives

12:15 PM Luncheon

1:30 PM Risk Distribution: Siblings or Strangers? Or Exposure Units?
• Why a captive wants third party risks – how measured?
• Disadvantages of a captive assuming third party risk
• Third party risks in light of the demise of the “economic family” theory
• “Brother-sister” risk distribution – what types of siblings are counted
• Homogeneity of risks – a developing requisite?
• Evolving IRS guidance and enforcement on risk pooling
• Distribution among entities versus distribution within an entity

2:15 PM Employee Benefits as Third Party Risk
• ERISA benefits – why insure them in a captive?
• Obtaining a DOL prohibited transaction exemption
• The “ex pro” option – availability and how to qualify
• IRS “look through” rulings / medical stop loss
• Non-ERISA opportunities and strategies

3:00 PM Break for Refreshments

3:15 PM Federal Excise Tax Developments
• FET basics
• IRS cascading theory and its enforcement aftermath
• Industry response, litigation and pending IRS appeal
• Varieties of tax treaty protection

3:45 PM Pools and Other Third Party Risks – What, Where and Why
• Commercial risk exchanging pools
• Other sources of third-party risk
• Understanding the “risk” in third-party risk

4:30 PM Redomiciling of Captive Arrangements
• Business reasons for changing domiciles
• Alternative approaches to accomplish redomiciling
• Tax and regulatory issues arising from various structures

5:15 PM Conference Adjourns for the Day


7:45 AM Continental Breakfast

8:15 AM Chairpersons’ Review of Day One and Preview of Day Two

8:30 AM Current IRS Audit Experience and Discussion of Recent Rulings and Cases
• Analysis of Revenue Ruling “safe harbors”
• Court decisions that will refine the definition of “risk distribution” and decide the validity of “cascading” federal excise tax
• In-depth analysis of recent rulings attempting to exclude business risks from the tax definition of insurance
• Ongoing battlegrounds such as tax status of loss portfolio transfers & retro programs
• IRS focus on “fortuity” and “paying your own losses” in tax definition of insurance
• Overview of commonly raised issues in captive income and excise tax audits
• The latest on state premium based taxes on captives and their policyholders as well as trend toward state income taxation of captives

10:00 AM Break for Refreshments

10:15 AM Overview of Cell, Series and Rent-a-Captives
• Structures for cell, series LLC and rent-a-captives
• Will courts respect cell walls’ segregation of risk?
• Analysis of proposed treasury regulations
• Testing for insurance tax treatment – cells must meet usual tests
• One taxpayer or many? – factors under IRS guidance
• Preferred stock vs contract rights
• Incorporated cells and hybrid cell companies – the next generation

11:00 AM Repatriation of Captive Profits
• Dividends
• Loan backs
• Pledges
• Receivables/commercial paper purchases
• Guaranties
• Impact on desired tax results and regulatory constraints

11:30 AM Sec 831(b) Election and Consequences
• Qualifications to be taxed under Sec 831(b)
• Election mechanics and consequences
• Computing investment income
• The other small insurance company – Sec 501(c)(15)
• Practical guidance for small insurance companies

12:15 PM Luncheon

1:15 PM State Taxation of Captives
• Premium, income or self-procurement taxes?
• How insurance company state taxation rules applied pre-NRRA
• Effect of federal NRRA “home state” and other provisions preempting state law
• The various reactions of states to NRRA
• Emerging trend to subject captives to state income tax

2:00 PM Basics of Captive Tax Compliance
• Required and optional federal tax filings for offshore captives
• Impact of FATCA compliance on captives
• Insurance company federal tax filings for domestic captives
• Dealing with an IRS captive audit at the field or appeals office levels
• Overview of state tax filings

3:00 PM Summary and Q & A Session

3:15 PM Conference Concludes


November 10 & 11, 2016    

McDermott Will & Emery
227 W Monroe Street, # 4700
Chicago, IL 60606

Hotel accommodations are at your own discretion. We suggest the following:

W Chicago - City Center
172 W Adams Street
Chicago, IL 60603
(312) 332-1200

Hyatt Centric The Loop
100 W Monroe Street
Chicago, IL 60603
(312) 236-1234



If you are unable to attend this event, you may: transfer your registration to another person from your company for the same event; or transfer your registration to a substitute event listed on our web site. In either instance, there will be no charge or penalty for substitution. To request a transfer, contact with the new attendee or substitute event information more than 5 business days prior to the conference start date. On the first day of the event, absent attendees will be considered “no shows” and will not be eligible for a refund, transfer, or substitute event.

Cancellations must be made in writing to more than 5 business days before the event and will be assessed a $350 conference setup fee. Cancellations will not be accepted if notice is received fewer than 5 business days before the event. For more information regarding administrative policies, complaints and cancellations, please contact us at 800.372.1033, or e-mail


Bloomberg BNA offers a hardship policy for CPAs and other tax and accounting professionals who wish to attend our live conference and seminars. Individuals must earn less than $50,000 annually in order to qualify. For individuals who are unemployed or earning less than $35,000 per year, a full discount off the price of registration for the program will be awarded. Individuals earning between $35,000 and $50,000 per year will receive a 50% discount off the price of the program. If an individual wishes to submit a case for hardship, he or she must contact Bloomberg BNA directly at

Please include the following information with your request: complete contact information, program for which a hardship reduction is being requested, requested amount for hardship reduction, and reason for applying for hardship. Please note that requests will not be considered until 30 days from the program date and that individuals may only apply for a hardship reduction once within a 12-month period. Bloomberg BNA reserves the right to make a final determination on a case-by-case basis. Our decision for granting a hardship is final and submission does not constitute acceptance.


Continental breakfasts, lunches, refreshment breaks, Bloomberg BNA Portfolio, and course materials in electronic format.