In this video, Bruce Wright, partner at Eversheds Sutherland (US) LLP, discusses section 953(d) of the Internal Revenue Code (IRC). Under section 953(d) of the IRC, non-US-domiciled captive insurers may elect to be taxed as if they were domestic companies for all purposes of the IRC. This means that the captive insurance company is treated as if it was formed in a US state for federal tax purposes.

Mr. Wright also talks about how to make a 953(d) election and explains what happens when a 953(d) election is terminated. According to Mr. Wright, with 953(d) elections, one has to be careful to comply with all of the requirements. He advises that if there is an income tax audit that raises issues that could lead to the 953(d) election being terminated, the captive will need to think about filing protective returns along with other issues.