Economic outlook spurs moves to demutualize
Article Abstract:
The IRS has issued two rulings pertaining to former mutual insurance companies that converted to stock companies. In one case, the company exchanged proprietary interest of policyholders for common stock and cash. The IRS ruled that only the cash payments constituted gain and were, therefore, taxable. In a more complicated case, the IRS ruled that certain stock transactions of a mutual company converting to a holding company constituted taxable gain.
Publication Name: Best's Review Property-Casualty Insurance Edition
Subject: Insurance
ISSN: 0005-9714
Year: 1992
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Captive insurers gain added "appeal."
Article Abstract:
Insurance for tax purposes is now allowed in a completely owned captive setting while there are unrelated risks. This is a result of cases involving Sears, Roebuck and Co; Amerco; Harper Group Inc; and the IRS. Risk shifting and risk distribution is no longer a sole determinant of insurance. Taxation is dependent on the form of transaction rather than if the transaction is independent of the tax aspects.
Publication Name: Best's Review Property-Casualty Insurance Edition
Subject: Insurance
ISSN: 0005-9714
Year: 1993
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Taxpayer prevails on captive issue
Article Abstract:
The US Claims Court has followed US Tax Court precedent in ruling that payments by an insurer to a captive insurance company constitute insurance, which makes such payments a deductible expense for tax purposes. However, the court held that this only applied in cases where the captive company insured substantial unrelated risk and the payments to the captive company were insurance in form and substance.
Publication Name: Best's Review Property-Casualty Insurance Edition
Subject: Insurance
ISSN: 0005-9714
Year: 1992
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- Abstracts: 1991 policyholders' surplus for leading property/casualty insurers. Property/casualty bond holdings
- Abstracts: 1991 assets for l/h insurers. Leaders by category. Expenses-to-premium ratios of the 100 leading life/health insurers
- Abstracts: Connecticut Mutual Life. Sun Life of Canada (U.S.). National Life of Vermont
- Abstracts: Circuit court rules on qualification ratio. IRS rules interest changes do not create new contracts. Mergers of insurers result in tax-attribute carryovers
- Abstracts: Quest for quality: the payoff for a quality program can be significant for insurers with patience and the willingness to expend considerable effort