Chairpersons:
Tom Jones, McDermott Will & Emery LLP, Chicago, IL
Roy Sedore, Baker & McKenzie LLP, New York, NY
P. Bruce Wright, Dewey LeBoeuf LLP, New York, NY
Charles Lavelle, Greenebaum Doll & McDonald PLLC, Louisville, KY
Monday, February 25, 2008
7:30 AM Registration & Continental Breakfast
8:15 AM Chairpersons’ Welcome & Opening Remarks
8:30 AM Potential Tax Benefits of an Insurance Affiliate
- Acceleration of risk funding deductions
- Premium deductibility & insurance treatment
- Unrelated business theory - business required
- Brother / sister risk - structures and risks
- Evaluation of IRS vs. case law definitions
- Mix of shareholders / insured’s
- Group captives and risk shifting
Roy Sedore, Baker & McKenzie LLP, New York, NY
9:45 AM Break for Refreshments
10:00 AM Review of Business Reasons for Utilizing an Insurance Affiliate
- Internal risk financing
- Profit center opportunity
- Claims, defense and administrative cost reduction
- Access to reinsurance and terrorism coverage
- Global based risk distribution
Arthur G. Koritzinsky, Marsh USA Inc., New York, NY
11:00 AM Onshore Captive Tax and Regulatory Considerations
- Onshore tax benefits - onshore management and loan backs
- Loss and unearned premium reserves
- Potential Impact of consolidated tax return proposed regulations
- Stock, mutual or reciprocal format for optimal tax results
- Regulatory concerns and basics of liability risk retention groups
Tom Jones, McDermott Will & Emery LLP, Chicago, IL
12:00 PM Luncheon
1:15 PM Offshore Captive Tax and Regulatory Considerations
- Subpart F treatment of insurance income
- Related party insurance income (RPPI)
- Passive foreign investment company (PFIC) rules
- When to make a IRC §953(d) onshore tax election
- Avoidance of a U.S. trade or business
- Federal excise tax considerations –IRC §4371
Roy Sedore, Partner, Baker & McKenzie LLP, New York, NY
2:00 PM Finding Third Party Risk: Internal & External
- Why a captive wants third party risks – how much is enough?
- Disadvantages of a captive assuming third party risks
- Third party risks in light of the demise of the "economic family" theory
- Commercial risk exchanging pools (e.g., Green Island)
- Homogeneity of risks - a developing requisite?
Charles J. Lavelle, Greenebaum Doll & McDonald PLLC, Louisville, KY
2:45 PM Break for Refreshments
3:00 PM Employee Benefits as Third Party Risk
- ERISA benefits - why insure them in a captive
- Obtaining a prohibited transaction exemption
- Post - Columbia Energy/ADM/International Paper “ex pro” option
- Non-ERISA opportunities and strategies
P. Bruce Wright, Dewey LeBoeuf, LLP, New York, NY
4:00 PM Repatriation of Captive Profits
- Dividends
- Loan Backs
- Pledges
- Guaranties
- Impact on desired tax results
Tom Jones, McDermott Will & Emery LLP, Chicago, IL
4:30 PM Overview of Cell and Rent-a-Captives
- Structures for cell and rent-a-captives
- Capital or additional premiums and profit sharing
- Comparison of Bermuda, Cayman, Vermont and Hawaii cell laws
- Cell and rent-a-captives that share risk
- One company or many & factors involved
- Preferred stock and securities laws
- Disclosure by brokers, agents and MGAs
Tom Jones, McDermott Will & Emery LLP, Chicago, IL
5:15 PM Redomestication of Captive Arrangement
- Business Reasons for Redomestication
- Alternative Structures for Redomestication
- Tax and Regulatory Issues Arising from Various Structures
P. Bruce Wright, Dewey LeBoeuf LLP, New York, NY
5:45 PM Meeting adjourns for the day
Tuesday, February 26, 2008
7:45 AM Continental Breakfast
8:15 AM Chairpersons’ review of day one and preview of day two
8:30 AM Current IRS Audit Experience and Discussion of Recent Rulings and Cases
- Analysis of recent Revenue Ruling “safe havens”
- Demise of IRS “economic family” theory and captive court decisions
- Potential impact of consolidated tax return proposed regulations
- In depth analysis of Rev. Rul. 2005-40 and captive topics listed in IRS Notice 2005-29 and Rev. Rul. 2007-47
- Emerging issues such as independent risk vs. independent entity risk distribution
- Cell company tax issues
Roy Sedore, Baker & McKenzie LLP, New York, NY
Tom Jones, McDermott Will & Emery LLP, Chicago, IL
Charles J. Lavelle, Greenebaum Doll & McDonald PLLC, Louisville, KY
Gary Bowers, Johnson Lambert & Co., LLP, Raleigh, NC
P. Bruce Wright, Dewey LeBoeuf LLP, New York, NY
10:30 AM Break for Refreshments
10:45 AM FIN 48
- New GAAP standard for booking tax positions
- Meaning and application of "more likely than not"
- Potential impact on IRS audits
- Disclosure, privilege and confidentiality issues including Textron case
Gary Bowers, Johnson Lambert & Co., LLP, Raleigh, NC
Tom Jones, McDermott Will & Emery LLP, Chicago, IL
11:15 AM State Taxation of Captives
- When do insurance company taxation rules apply
- Premium or self-procurement taxes
- Nexus considerations - the Dow Chemical case in Texas
Kimberley Reeder, Baker McKenzie LLP, Palo Alto, CA
P. Bruce Wright, Dewey LeBoeuf LLP, New York, NY
12:00 PM Luncheon
1:00 PM Case Study – Principles of Corporate Finance & Non-Tax Analysis of a Major Multinational’s Captive
- Reasons for forming a captive
- The feasibility study and implementation process
- The internal (corporate) and external (licensure) formation process
- How the captives fit into the corporate structure
- Pros and cons of the structure chosen - tax, regulatory and other
Judith S. Camp, Concentra Inc, Addison, TX
2:30PM Basics of Captive Tax Compliance
- Required and optional federal tax filings for offshore captives
- Insurance company federal tax filings for domestic captives
- Dealing with an IRS captive audit at the field or appeals office levels
Gary Bowers, Johnson Lambert & Co., LLP, Raleigh, NC
3:15PM Summary and Question & Answer Session