"Insurance Risk" as a Tax-Deductibility Requirement

As touched on in the video “Requirements for Tax-Deductibility of Captive Insurance Premiums” by P. Bruce Wright of Sutherland Asbill & Brennan LLP, it is important to determine whether or not the exposure being "insured" is indeed insurable for tax purposes. One of the most important factors in this undertaking is whether or not there is an insurable interest on the part of the "insured," which is not the case for situations involving derivatives, for example. Several other instances that would not be considered insurance from the point of view of the Internal Revenue Service are coverage for business risks (which are completely under the control of the "insured"), residual value, or retroactive insurance.