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.

 Course Level: Basic Delivery Method: Live Group

LEARNING OBJECTIVES 

After attending this event, participants will be able to
• Describe premium and insurance reserves deductibility
• List preferred stock vs. contract rights
• Evaluate claims, defense and administrative cost reduction
• Discuss emerging battlegrounds such as independent risk vs. independent entity risk distribution
• Identify business reasons for redomestication
• Understand IRS guidance on pooling

All paid attendees will receive the Bloomberg BNA Portfolio: U.S. Income Taxation of International Insurance Activities #931
*One Portfolio per paid attendee. Quantities are limited.

NOTE:We respectfully ask IRS employees or representatives not to register for this course. IRS employees or representatives who register will be asked not to attend. Please contact customer service if you have any questions prior to registration.

PREREQUISITES

There are no prerequisites for attending this program.

SUBSTITUTIONS, CANCELLATIONS & COMPLAINTS

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 customercare@bna.com 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 customercare@bna.com 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, such as complaints and cancellations, please contact us at 800.372.1033, or e-mail customercare@bna.com.

McDermott, Will & Emery
500 North Capital St NW
Washington DC, 20001
Tel: 202-756-8000

Hotel accommodations are at your own discretion.

We suggest the following:

Hyatt Regency Washington on Capitol Hill – Tel: 202.737.1234
400 New Jersey Avenue, NW, Washington, DC 20001

 

The Liaison Capitol Hill – Tel: 202.638.1616
415 New Jersey Avenue, NW, Washington, DC 20001

MONDAY, OCTOBER 28, 2013

7:30 AM Registration and Continental Breakfast

8:00 AM 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 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 similar structures
• Evaluation of IRS guidance vs. case law definitions

10:00 AM Break for Refreshments

10:15 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

11:00 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
• Update on anti-tax haven and foreign account initiatives

11:45AM Evolution of Federal Taxation of Captives
• Clash of fundamental tax concepts
• 1941 U.S. Supreme Court case named LeGierse the start
• First wave of cases – IRS victories
• Second wave of cases – taxpayer victories
• IRS limited concessions and safe harbors
• Today – the third wave of cases?

12:15 PM Luncheon

1:30 PM Risk Distribution: Siblings or Strangers?
• 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?

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 - how to qualify?
• 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
• Varieties of tax treaty protection

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

4:30 PM Redomestication of Captive Arrangement
• Business reasons for redomestication
• Alternative approaches to accomplish redomestication
• Tax and regulatory issues arising from various structures

5:15 PM Seminar Adjourns for the Day

TUESDAY, OCTOBER 29, 2013

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”
• Captive court decisions and demise of IRS “economic family” theory
• In-depth analysis of recent rulings attempting to limit the tax definition of insurance
• Emerging battlegrounds such as independent risk vs. independent entity risk distribution, insurance vs business/economic risks and 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

10:00 AM Break for Refreshments

10:15 AM Overview of Cell and Rent-a-Captives
• Structures for cell and rent-a-captives
• Will courts respect cell walls’ segregation of risk?
• Analysis of proposed Treasury regulations
• Testing for tax treatment - cells must include shared risks
• 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

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
• Nexus considerations – continued relevance of Todd Shipyards, Dow Chemical and similar cases

2:00 PM Basics of Captive Tax Compliance
• Required and optional federal tax filings for offshore 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 Seminar Adjourns


Copyright Bloomberg BNA 2013

EDUCATIONAL COURSE CREDIT

UP TO 15 CPE CREDIT HOURS AVAILABLE

Bloomberg BNA is registered with the National Association of the State Boards of Accountancy as a sponsor of continuing professional education on the National Registry of CPE sponsors. State Boards of Accountancy have final authority on the acceptance of individual courses. Complaints regarding registered sponsors may be addressed to NASBA, 150 Fourth Avenue North, Suite 700, Nashville, TN 37219-2417.

UP TO 15 CLE CREDIT HOURS AVAILABLE

Bloomberg BNA will apply for continuing legal education credits in any state or jurisdiction where available. For more information, please contact Bloomberg BNA customer service at 800.372.1033 and ask to speak to the CLE Accreditations Coordinator, or email us at accreditations@bna.com .

HARDSHIP POLICY

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 accreditations@bna.com. 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.