A recent court decision rejected the IRS’s novel “cascading” excise tax theory with respect to reinsurance transactions between two non-U.S. companies. The implications of this decision are relevant to U.S. ceding companies and to their reinsurers, both domestic and foreign.
According to Freeborn & Peters attorney Mark R. Goodman, a Partner in the Corporate Practice Group and a Member of the Insurance and Reinsurance Industry Team, if the decision stands, it could even have an effect on the pricing of reinsurance and, therefore, an indirect effect of the pricing of direct policies in the U.S. Mark provided his analysis in an article titled "IRS Overreach Rejected in Validus Decision," which was published February 13, 2014, by HarrisMartin's Reinsurance Litigation Report.
A full PDF of the article is attached.
