Southern Pines
21 April 2017
Reporter: Becky Butcher
Exclusive: NCCIA weighs in as 1 May looms
The North Carolina Captive Insurance Association (NCCIA) has filed a third-party observation in support of a lawsuit in federal court seeking a temporary injunction to stop the Internal Revenue Service (IRS) from implementing Notice 2106-66.

The third-party observation, prepared by attorneys of Womble, Carlyle, Sandridge & Rice, supports the litigation now pending in the US District Court for Eastern District of Tennessee.

CIC Services, a captive manager, filed the lawsuit against the IRS and the US Treasury. The 1 May deadline for micro captives to report to the IRS is rapidly approaching.

Thomas Adams, president and CEO of the NCCIA, said the brief argues that Notice 2016-66, which requires micro captives to provide substantial reports on their activity to the IRS, imposes a heavy burden on the public with little or no benefit to the IRS.

The notice, if not enjoined, will cause irreparable harm to the captive insurance industry and its stakeholders, as well as causing damage to the economic and regulatory interests of North Carolina, according to the brief.

Tennessee Judge Travis McDonough has already conducted a hearing and a ruling is expected soon.

The IRS has argued that Congress has given it the authority to issue this kind of notice.

The US government has also argued the lawsuit is barred by the Anti-Injunction Act, which precludes actions against the government seeking to bar the assessment and collection of taxes.

Adams noted that an appeal from either party to the US Court of Appeals for the Sixth Circuit is likely, whatever the result.

He added: “The North Carolina Captive Insurance Association is committed to the responsible growth of captives not only in our domicile but throughout the US. We see the filing of this friend of the court brief as yet another example of that on going effort and for North Carolina to be seen as a leader among domiciles.”

More regulation news
The latest news from Captive Insurance Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
UK to implement ILS regime this autumn
27 June 2017 | London | Reporter: Becky Butcher
London’s insurance-linked securities regulation is now being finalised by the UK Government ready for implementation this autumn, according to a letter sent from HM Treasury to the London Market Group’s Nicolas Aubert
Texas governor signs off captive bill updates
19 June 2017 | Austin | Reporter: Becky Butcher
Texas governor Greg Abbott has signed the state’s new captive bill into law
New FHLB legislation could see captives return
16 June 2017 | Washington DC | Reporter: Becky Butcher
US legislators have introduced a new bill to allow captive insurance companies that were members of a Federal Home Loan Bank (FHLB) prior to 12 September 2014 to return to the fold
SIIA asks Treasury to look at Notice 2016-66
15 June 2017 | Washington DC | Reporter: Becky Butcher
The Self-Insurance Institute of America (SIIA) has asked the US Treasury to include Notice 2016-66 in the President Donald Trump-ordered review of US tax rules
Financial CHOICE Act passes House
09 June 2017 | Washington DC | Reporter: Mark Dugdale
The Financial CHOICE Act, the legislation that proposes to repeal and replace the Dodd-Frank Act, has passed the House of Representatives
US-EU covered agreement moves closer to implementation
08 June 2017 | | Reporter: Mark Dugdale
The European Council has authorised the signing of the US-EU covered agreement on insurance and reinsurance, paving the way for its passage on one side of the Atlantic, at least
Insurers and reinsurers struggle with SFCR in Ireland
07 June 2017 | Dublin | Reporter: Mark Dugdale
The first round of solvency and financial condition reports filed in Ireland under Solvency II show that Irish insurers and reinsurers struggled with the system of governance disclosure requirement, according to Deloitte