831(b) Tax Election

• First $2.3 MM of Annual Premium Ceded is Tax-deferred

Qualifying Elements (4-Part Test)

• Risk Shifting
• Risk Distribution
• Fortuitous Risk
• Principles of Insurance

Safe Harbor Rulings

• Rev. Rul. 2002-89 - 50% Unaffiliated Risk
• Rev. Rul. 2009-26 - Recognized reinsurance Under 831(b) Tax Code

Private Letter Rulings

Recognized Pro-Rata Sharing

• PLR 200950016
• PLR 200950017