Sometimes praise comes from the most unlikely sources. With the economic onslaught caused by COVID-19, even a New York Times columnist is suggesting what we have always said – that small captives are a powerful risk management and survival vehicle for small and middle-market companies that can actually save businesses and save peoples’ jobs.
The coronavirus represents a potentially historic challenge for the world’s economy, and captive insurance companies are by no means immune from its potential impacts. In fact, unless risks are properly managed, captive insurance companies are potentially doubly exposed to coronavirus related losses. We explain why below, and we also note some steps that you might take now to mitigate much of the potential risk.
Over the past few months, we have been reporting on CIC Services’ lawsuit against the IRS and its unlawful Notice 2016-66. In a split decision, the U.S. Sixth Circuit Court of Appeals denied granting an injunction against, IRS Notice 2016-66, but the dissenting opinion was powerful and compelling. CIC Services has appealed the case to the U.S. Supreme Court and has picked up broad support in its case against the IRS and administrative state abuse of power.
American author Mark Twain popularized the expression that there are, “lies, damn lies and statistics.” I suspect that if he were alive today, he might say, “there are lies, damn lies, statistics and IRS press releases about captive insurance companies.”