Legal Developments
Pandemic BI Bills Pose Existential Threat to Insurance Industry: Best
Legislation that would nullify business interruption (BI) exclusions in existing US insurance policies would pose an existential threat to property-casualty insurers, according to a recent commentary from A.M. Best. In the United States, most commercial insurance policies exclude losses caused by communicable diseases or viruses. Read More
Supreme Court Agrees To Hear CIC Services Micro-Captive Case
The US Supreme Court has agreed to hear the CIC Services, LLC, challenge of the Internal Revenue Service (IRS) position that micro-captives are "transactions of interest" that should be reported to the IRS. In 2019, a federal appeals court upheld a lower court ruling supporting the position of the IRS. Read More
Insurance Trade Groups Oppose Draft Bill Requiring Pandemic Coverage
A group of insurance industry trade organizations expressed opposition to a draft bill that would require insurers to offer pandemic business interruption coverages. Such a measure "would threaten the very existence of the business interruption insurance market," the groups said. Read More
Letter Challenges IRS Treatment of Small Captive Insurance Companies
A letter to US Rep. Kevin Brady (R-Texas) takes issue with Internal Revenue Service (IRS) treatment of so-called 831(b) captive insurance companies. The current COVID-19 pandemic underscores the importance of captive insurance programs to midmarket companies, the letter says, but the IRS is targeting and harassing small captives. Read More
New Utah Law Lets Captives Reinsure Risks from Any Insurer
Legislation recently signed into law by Utah Governor Gary Herbert will expand the business that Utah captive insurance companies are allowed to do. The new measure, HB 37, will allow Utah captives to reinsure risks ceded by any other insurer. Read More