#Knoxville #United States #Small Business #CIC Services #IRS Rule

Captive Insurance Industry Sounding the Alarm

The captive insurance industry is in an uproar as CIC Services has made a resounding appeal to Congress, urging swift action to invalidate a recently enacted IRS rule that poses a significant threat to small and mid-sized businesses across the United States. This new regulation, finalized in January 2024, introduces harsh restrictions on IRC Section 831(b)—a crucial provision intended to empower companies to manage their risks in an efficient and affordable manner.

The Impending Risk

At a time when businesses are grappling with surging commercial insurance premiums and diminishing coverage options, the IRS's recent decision could leave many enterprises without effective means to shield themselves from financial uncertainty. As Sean King, CEO of CIC Services, articulates, "Congress enacted the 831(b) election nearly 40 years ago to give small and mid-sized businesses a way to manage risk affordably, yet this new IRS rule severely undermines that purpose."

King's words underline a critical reality: if the rule stands, businesses will face heightened risks without viable insurance solutions, which in turn could jeopardize their financial stability.

Time Is of the Essence

Under the Congressional Review Act (CRA), Congress has a limited timeframe to introduce a resolution to nullify this new regulation. CIC Services is lobbying lawmakers for immediate action, emphasizing that the clock is ticking. The company encourages legislators to:

1. Introduce a joint resolution under the CRA to oppose the IRS rule.
2. Acknowledge the economic damage this regulation threatens to induce among small businesses within their constituencies.
3. Advocate for just and reasonable insurance options for American enterprises, ensuring they are not disenfranchised by policies that disregard their concerns.

Empowering Business Owners to Advocate

While the responsibility ultimately lies with Congress, business owners are urged to partake in the advocacy process to amplify their voices. They can make a meaningful impact by:

• - Contacting their congressional representatives to express how the new rule will adversely affect their operations.
• - Sharing personal anecdotes to illustrate the tangible consequences of losing access to captive insurance as a risk management tool.
• - Engaging in advocacy efforts, collaborating with industry associations, and remaining informed about developments in the legislation.

This collaborative approach can strengthen the message to lawmakers, showcasing the dire need for legislative action that prioritizes the interests of small and mid-sized enterprises.

About CIC Services

CIC Services operates as a leading captive insurance manager and strategist. Since its establishment in 2005, the organization has been dedicated to helping small and mid-sized businesses convert risk into financial opportunity by establishing their own insurance companies. For more information, interested parties can visit CIC Services' official website. Additionally, those wishing to further this advocacy can reach out to Randy Sadler at CIC Services for assistance.

As the clock ticks and uncertainty looms, the chorus for change grows louder. It is imperative that Congress acts decisively to protect the interests of businesses reliant on captive insurance, ensuring they have the resources necessary to navigate the increasingly challenging landscape of risk management.