Wednesday, August 5, 2020

Welcome to the Montana Captive Insurance Association!

Montana licensed its first captive insurance company in January 2002. Since then the number of active captive insurance companies has grown to more than 300 captive insurance entities. These captives insure rural hospitals, nursing homes, fuel stations, commercial trucking firms, an investment firm, a medical professional firm, a construction company and attorneys.

The Montana Captive Insurance Association, Inc. (MCIA) is dedicated to promoting the development and expansion of captive insurance programs within the state of Montana. As part of this mission it will provide its membership with unbiased industry information, networking and educational opportunities. It also provides the state's captive industry an effective voice in the legislative/regulatory process.

MCIA Supports Captive Industry Litigation Effort in Response to IRS Regulatory Overreach
 
July 23, 2020 - The Montana Captive Insurance Association, Inc. (MCIA) joined with nearly two dozen other captive insurance organizations this week to file an amicus brief before the U.S. Supreme Court in the case of CIC Services LLC v. IRS ('CIC'). The objective of this litigation effort is to encourage U.S. Supreme Court to overturn a decision by the 6th Circuit Court that challenged IRS authority under Notice 2016-66 ("the Notice").
 
At issue is that the captive industry believes the Notice unfairly imposes significant administrative burdens on owners, advisors and managers who participate in certain captive transactions, and stakeholders were offered no meaningful opportunity to provide comment or feedback prior to the Notice's immediate implementation in 2016, nor the ability to appeal the filing requirements until paying a penalty.
 
"As the trade association representing one of the leading captive insurance domiciles in the United States, we believed it was important to support this effort, both in name and through a financial contribution," said MCIA Chairman John Huth. "While our association remains focused on issues within the state of Montana, we concluded that this national issue is directly affecting several of our members."
 
The coalition amicus brief, prepared by Kevin Doherty and Tony Greer of Dickinson Wright PLLC, focuses on three key arguments at issue in the CIC case. First, that the Court should consider the heavy regulatory burden and harm being caused to taxpayers, namely the captive insurance industry. The Notice requires taxpayers to report duplicative information and imposes an undue financial burden to small- and medium- sized businesses, all for little to no benefit to the IRS.
 
Second, the Administrative Procedures Act ("APA") requires federal agencies to allow for a meaningful opportunity for public comment on proposed rules. The industry brief points out that the IRS did not comply with the APA as it simply issued the Notice without offering public comment and review.
 
Finally, the brief argues that the Anti-Injunction Act ("AIA") prohibition on preventing challenges to the IRS should not extend to reporting requirement, such as are imposed by the Notice.
 
A link to the full coalition brief can be found here.
 
 
 

 

 

 

Montana Captive Insurance Association, Inc. (MCIA)

1302 24th St West #303
Billings, MT 59102-3861

Phone: 866.388.6242
Email:
info@mtcaptives.org