Tax Court upholds captive insurance arrangement

In another victory for the captive insurance industry, the Tax Court has affirmed the validity of another captive insurance arrangement. Securitas Holdings, TC Memo 2014-225 (Oct. 29, 2014). The major issue in the case is that the Court confirmed that a parental guaranty of the captive’s insurance obligations does not invalidate the structure, in a case in which the insurer was held to be well-capitalized.