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NCCIA Newsletter | April 2017


APRIL 2017

(Southern Pines)….The Federal District Court for the Eastern District of Tennessee rejected a Preliminary Injunction to prevent enforcement of IRS Notice 2016-66.

The Court convened in Tennessee on Friday, April 21st to hear the request for injunctive relief brought by CIC Services as a manager of captive insurance companies and Ryan LLC as a captive service provider to block the Notice that requires filing compliance by May 1st. This ruling follows a hearing held in Chattanooga on April 19th.

The Court’s Conclusion at page 9 states the following: “Even taking into consideration that the Plaintiff’s have demonstrated some likelihood of irreparable harm, the Court finds Plaintiff’s have not carried their burden of demonstrating that a preliminary injunction is warranted, primarily because Plaintiff’s requested injunction is likely barred by the Anti-Injunction Act.”  Thus, compliance with the IRS Notice is now required, unless the IRS eliminates or substantially modifies the reporting requirements, which is unlikely.

 Lobbying efforts undertaken by NCCIA since November to secure administrative and/or legislative relief, did not obtain the needed relief. To the extent that the captive insurance industry has or will suffer irreparable harm, the Court made a finding that such harm most likely resulted from the IRS’s announcement that captive insurance companies are a potential tax scheme, not from the actions challenged in the Tennessee litigation. [See Fn. No. 7 at page 8 of ruling filed 04/21/17.] While your Association strongly disagrees with the Court’s ruling and findings, it believes any continuing challenge to the Agency’s Notice would be unproductive.

 NCCIA filed an Amicus Brief with the Court that stated its articulated and reasoned position on the issues. (See Special Edition of NCCIA Newsletter). It is left to another day to see if the Treasury can be persuaded otherwise on whether it’s Notice goes too far, and exceeds a congressional grant of regulatory authority.

Lane Brown, NCCIA Vice President of Government Affairs told the Newsletter that “the association pursued a three pronged effort to obtain relief from the onerous effects of this Notice.” Continuing he said “A three pronged effort, legislative, a regulatory approach and then the courts were not enough to carry the day. It was a big league effort, we just would have preferred a better outcome.”

Early Bird Registration for the 2017 NCCIA Annual Conference is now open on the association’s website. Early Bird Registration is available from now until June 15, 2017. After that date standard rates will apply. The Conference will open at the Ballantyne Hotel & Lodge in Charlotte on Monday, August 21st. To view the agenda and register go to .

Association  CEO, Thomas Adams announced today that the Keynote Speaker on Monday is John B. Jung, Jr., Senior Managing Director & Head of BB&T Capital Markets. Jung will present an overview of North Carolina’s prospects for economic growth and how those prospects will impact the captive industry. The Opening Session is sponsored this year by the Womble, Carlyle, Sandridge and Rice Law Firm with headquarters in Winston Salem.

Adams also announced significant growth in the overall program with the addition of 4 additional breakout sessions. “This year conference attendees will have the ability to choose between three concurrent breakout sessions rather than just two, as in previous years. The Golf Tournament has been enhanced with players having the chance to win a new car worth $50,000 with a hole in one on the par 3, 190 yard #16.” Adams also said that the most popular social event of the captive year, The North Carolina Pig Pickin’ will return along with King Curtis, the Carolina’s top beach music DJ spinning the evening’s tunes.”

A very limited number of booths are still available in the Exhibit Hall for the Annual Conference. The number of booths available has been increased to 23 this year to accommodate the demand. If you want to exhibit now is the time to contact Diane Waltman in the NCCIA Headquarters.

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