Starting December 31, 2016 small insurance companies, including captive insurance companies, making the Internal Revenue Code section 831(b) election will have to comply with the new requirements within the federal bill known as Protecting Americans from Tax Hikes (PATH) Act.
Here’s what you need to know:
1. The first is how much premium an insurer may derive from a single person
2. The second is new ownership requirements for these insurers.
Captive Insurance Bulletin No. 6 establishes procedures so that Delaware Captive Insurance Company owners may satisfy the PATH Act’s new mandates. Specifically, Bulletin No. 6 establishes two new cost efficient application processes that captive insurance company owners may follow to either change the ownership of an existing captive, or allow for the creation of a new captive.
The full text of Captive Insurance Bulletin No. 6 can be found at http://www.delawareinsurance.gov/departments/documents/bulletins/CaptiveInsuranceBulletinNo6.pdf.
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