If you find your company in the midst of an IRS examination, do you know what you should expect throughout the process? Before setting expectations, it is essential to recognize how insurance accounting and taxation are specialized knowledge sets. Over the past decade, progressive budget cuts to the IRS agency have hindered the agency's ability [...]
Most insurance companies may have experienced the occasional federal excise tax examination, but all has been quiet in recent history regarding income tax examinations. This likely has to do with some significant challenges the IRS has been facing. Anyone waiting on the IRS can attest to the gradual slowing of the IRS’ ability to process [...]
Although many authors have written the same message across different industries, these are unprecedented times that have our governments, health professionals, financial markets, and so many other industries. Everyone is scrambling to address what has happened and anticipate what may come next. These preparations include the insurance markets—state insurance departments around the U.S. are rushing [...]
The coronavirus has been described by many as both a healthcare crisis and an economic crisis. This pandemic has wreaked havoc on both our healthcare systems and infrastructure, while also having an unprecedented impact on financial markets and investor confidence. Most insurance business models depend heavily on a successful investment portfolio strategy and, therefore, are [...]
The effects of the COVID-19 virus are only beginning to be felt within our communities and across the nation. Both business leaders and employees are looking for answers to difficult questions as we work to control both the spread of the virus and the economic effects after its curtailment, resulting in significant insurance policyholder considerations [...]
The IRS has announced acceptance rates for a time-limited settlement offer made to certain taxpayers under audit who participated in abusive micro-captive insurance transactions. Nearly 80% of taxpayers who received offer letters elected to accept the settlement terms. The settlement offer followed three U.S. Tax Court decisions confirming that certain micro-captive arrangements are not eligible [...]
The Tax Cuts and Jobs Act (TCJA) made the following changes to the discounting rules for non-life insurance companies for taxable years beginning after Dec. 31, 2017: repealed the election of a company to use its own historical loss payment patterns for discounting purposes; amended the computational rules for determining loss payment patterns; and established [...]
A captive insurance company (or “captive”) is a licensed insurer generally established to meet the risk management needs of a specific company or group of companies. Captive structures are primarily formed either to supplement existing insurance coverages, fund blocks of risk exposures, or provide coverage for atypical risks. Utilizing captive programs enables businesses to manage [...]
Insurance fraud can be a beast, costing the average organization as much as 5% of its revenues. The bigger the beast – that is, the higher the fraudster’s seniority level on the company’s organizational chart - the higher the damage and the losses the fraudster is likely to cause, according to the Association of Certified [...]
Technological innovations and advances have exploded in the past few years, and engineers have created real-life “futuristic gadgets” — from handheld devices to self-driving automobiles and interactive refrigerators — that were once thought to only be possible in dreams or movies. These breakthroughs are crossing over into the insurance industry, a sector that is often [...]
More than a decade has passed since the National Association of Insurance Commissioners (NAIC) introduced us to the risk-focused examination process. Although this process has been in place for some time, insurance regulators and examiners must remain cognizant of emerging requirements and issues, as they have been plentiful and ever-changing in this area. By paying attention to updates, examiners can properly identify, [...]
