As touched on in the video “Requirements for Tax-Deductibility of Captive Insurance Premiums” by P. Bruce Wright of Sutherland Asbill & Brennan LLP, there must be an actual economic transfer of the burden of risk for an exposure to be considered insurable for tax purposes. At the same time, the insurer must have sufficient risk distribution, either via a certain percentage of unrelated business or via a certain minimum number of subsidiaries, as determined by the Internal Revenue Service and the courts, to adequately cover payment of losses with the premium collected. Several high-profile cases that have significantly impacted the way that this requirement is interpreted, and likely will result in further clarification in the courts of the involved issues, are also reviewed in this video.