Client Services / Tax / Insurance Companies and Products Tax

Insurance Companies and Products Tax

At McDermott Will & Emery, we advise our clients with respect to the federal, state and local tax treatment of insurance companies and their products.  We provide a full range of legal services in this area, including advice and planning and representation of clients before federal agencies, the courts, U.S. Congress and state insurance commissioners and agencies.

Advice & Planning
We provide advice and planning assistance to clients on a variety of tax matters for insurance companies, their affiliates and their policyholders.  Typical planning and advice matters include:

  • Analysis and impact of tax law changes affecting life insurance companies, property and casualty insurance companies, reinsurance companies, captive insurance companies and other risk transfer vehicles
  • Tax consequences to policyholders and companies of new product designs, including individual and group life, health and annuity products, variable or separate account products, long-term care products, life insurance pension products and retrospectively-rated insurance
  • The tax consequences of restructurings, including conversion of mutual companies to stock companies, reorganizations, acquisitions, dispositions and spin-offs
  • Tax consequences of changes in reserves, update programs, transfers of property and reinsurance arrangements
  • Tax aspects of foreign operations for commercial insurance companies, offshore agencies and captives
  • Tax efficient interaction with single parent and group captives both onshore and offshore
  • Tax treatment of investments, including debt obligations, real estate joint ventures and partnerships, mutual funds, foreign currencies and surplus notes
  • Tax treatment of the issuance and use of all types of derivatives, financial products and financial instruments
  • Securitization transactions involving insurance companies, reinsurance companies and insurance related transactions
  • Federal excise tax and state taxes imposed on insurance premiums
  • Structuring tax advantaged multi-state operations
  • Compliance with information reporting and tax withholding rules


Audit & Litigation Practice

We represent many clients on issues arising from audits of their tax returns.  This work includes advice and assistance during the audit phase, protest of proposed deficiencies and dealings with government appeals office.  Our lawyers have a wealth of experience, having obtained successful outcomes in representing our clients in tax controversies in all federal courts and in state and local courts and administrative tribunals.

Administrative & Regulatory Practice

We represent our insurance company clients and their affiliates in regulatory and administrative matters before the Internal Revenue Service and state and local tax and other administrative agencies with respect to major insurance industry tax issues.  Administrative and regulatory matters in which our lawyers have been involved include:

Private letter rulings regarding company tax and product tax issues, such as the tax treatment of separate account contracts and structured settlements and issues regarding the definition of life insurance, modified endowment contracts and annuity contracts

  • Written comments and testimony on official IRS and state tax department guidance involving insurance tax issues, such as split-dollar, modified guaranteed contracts, accelerated death benefits, deferred acquisition costs, reserves issues and subpart F
  • Participation in industry trade association projects, such as seeking guidance on newly enacted insurance tax provisions and tax issues of interest to the insurance industry

Captive Insurance Planning & Audit Practice

We advise our clients on the feasibility and formation of captive insurance companies and alternative risk transfer vehicles.  Our experience includes both onshore and offshore domiciles, as well as stock, mutual and reciprocal structure formats.

Legislative Matters

We are actively involved in legislation on a wide range of insurance tax matters.  Our work includes developing and seeking changes to laws, as well as monitoring legislative activity and advising our clients with respect to the impact of proposed legislative changes and strategies for response.  Representative legislative projects in which our lawyers have participated include:

  • Proposing legislation affecting annuities, exchange of variable products and corporate-owned life insurance
  • Following and analyzing major legislation affecting insurance companies, banks and other financial intermediaries

Contacts

Tax Client Services

McDermott Will & Emery

McDermott Will and Emery