CIC Services Urges Congress To Overturn IRS Captive Insurance Rule

In a statement from CIC Services, the firm urged Congress to review a newly finalized Internal Revenue Service (IRS) rule impacting small captive insurance companies. The regulation, finalized in January 2024, imposes restrictions on Internal Revenue Code Section 831(b), a provision that has long allowed businesses to self-insure affordably.

CIC Services said the new rule comes at a time when businesses are already facing rising commercial insurance premiums, higher deductibles, and fewer coverage options. The firm stated that if the regulation remains in place, many businesses may have fewer alternatives to protect themselves against financial uncertainty.

"Congress enacted the 831(b) election nearly 40 years ago to give small and midsized businesses a way to manage risk affordably, yet this new IRS rule severely undermines that purpose," CIC Services CEO Sean King said. "Congress has a clear opportunity to act now, overturn this rule, and protect businesses from unnecessary financial hardship."

According to CIC Services, lawmakers have a limited window under the Congressional Review Act (CRA) to introduce a resolution to overturn the regulation. The statement said that timely action is necessary to address potential economic consequences for small businesses.

CIC Services is calling on senators and representatives to introduce a joint resolution under the CRA to disapprove of the IRS rule, consider its financial impact on small businesses in their districts, and support reasonable insurance options. The firm stated that ensuring businesses retain access to captive insurance is important for long-term risk management.

While the responsibility to act lies with Congress, CIC Services said business owners can play a role by urging their elected officials to support a CRA resolution. The firm encouraged business owners to contact their members of Congress, share personal experiences about the impact of the rule, and engage in advocacy efforts with industry groups.

For more information on supporting this effort, CIC Services advised contacting Randy Sadler at [email protected].