The captive insurance community was taken off guard by aproposed federal tax regulation that would put captives in the sameboat as pure self-insureds, but the alternative risk-transfersector quickly rallied to fight back and try to head off thepotentially devastating move.

As reported by Caroline McDonald, the IRS ambushed captiveplayers, publishing its controversial proposal in the Sept. 28Federal Register with no advance warning.

What might the change mean for captives? What difference does itmake if captives are considered just another self-insured, ratherthan a separate risk-transfer entity?

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