As discussed in the video "Why Is Tax-Deductibility of Premiums to a Captive Important?" by P. Bruce Wright of Eversheds Sutherland (US) LLP, captive insurance companies would prefer their premium to be tax-deductible. This video explains that in order for any insurance premium to be tax-deductible, the insurance contract must have all of the attributes of an insurance policy, and the subject of the policy must be insurable for tax purposes. To qualify as insurance, (1) risk transfer (risk shifting) must be present (i.e., an actual economic transfer of the burden of risk must take place) and (2) risk distribution must take place (i.e., the insurer must have sufficient independent risk and premium from unrelated parties pooled to cover loss payments).