Bench & Bar March/April 2026

ABOUT THE AUTHOR

AMANDA S. LUBY is a 2003 graduate of the University of Kentucky Rosenberg College of Law. Prior to going in-house and becoming chief legal offi

2025). 14 How Captive Insurance Saved the Universi ty of California Millions of Dollars, WTOP News (Aug. 24, 2023), https://wtop.com/ sponsored-content/2023/08/university-of-cal ifornia-achieves-stability-and-predictabili ty-by-forming-captive-insurance-compa ny-in-dc (last visited Apr. 14, 2025). 15 https://www.tn.gov/commerce/news/2022/8/8/ new-tn-captive-insurance-co-to-create-savings on-insuring-state-property.html (last visited Apr. 14, 2025). 16 See , Kenneth Aruallo, “Arkansas Passes Bill To Establish Bill For Public Education,” INS. BUS. MAG. (April 7, 2025). 17 See , https://www.captive.com/news/captives-of fer-sound-solutions-for-the-healthcare-in dustry-insurance-crisis#:~:text=Captive%20 Solutions%20for%20the%20Healthcare%20 Industry&text=Since%20the%201970s%2C%20 healthcare%20providers,source%20of%20cap turing%20underwriting%20profit (last visited Apr. 15, 2025); Medical Liability Reform 2024, AMERICAN MEDICAL ASS’N (2024), https:// www.ama-assn.org/system/files/mlr-now.pdf (last visited Apr. 14, 2025); Medical Liability Premiums Increases For A Fourth Year,” AMER ICAN MEDICAL ASS’N (Apr. 19, 2023); see here, https://www.ama-assn.org/press-center/ press-releases/surge-medical-liability-premi ums-increases-reaches-fourth-year. 18 See , “Two Top 50 Law Firms Set Up Captive Insurers,” LAW.COM INT’L, Hannah Walk er (July 25, 2022), see here, https://www.law. com/international-edition/2022/07/25/two top-50-law-firms-set-up-captive-insurers/?slre turn=20260126134051. 19 “Insuring Your Farm – The Rise of Microcaptive Insurance,” University of Nebraska-Lincoln.” See, https://cap.unl.edu/news/strategically- insuring-your-farm-rise-micro-captive-insur ance/ (Mar. 24, 2025). 20 See , https://captive.insurance.ky.gov/newstatic_ info.aspx?static_id=384&menuid=90 (last visit ed Apr. 14, 2025). insurance program. Insurance policies can be drafted to address the unique risk points to which an enterprise is exposed. Moreover, captives provide premium rate stability, something that CEOs and CFOs appreciate when establishing annual bud gets. Ultimately, whether a captive is a wise investment for a business must be made on a case-by-case basis. Given that many industries face difficult insurance predica ments, lawyers who familiarize themselves with captives as risk management tools can provide a real value-add for clients.

ENDNOTES 1 See , “Ernst & Young 2024 Global Insurance Out look,” accessible via: https://www.ey.com/con tent/dam/ey-unified-site/ey-com/en-gl/insights/ insurance/documents/ey-2024-global-insur ance-outlook-report-v2.pdf (last visited January 26, 2026). 2 See , https://www.captive.com/news/2024-a milestone-year-for-captive-insurance-growth (last visited Apr. 14, 2025). 3 See , Amanda Luby, “What Every Business Law yer Needs To Know About Captive Insurance,” American Bar Ass’n, THE BRIEF (Aug. 2024). 4 Captive Insurance Companies, Nat’l Ass’n of Ins. Comm’rs (Jan. 31, 2024), https://content.naic. org/cipr-topics/captive-insurance-companies. 5 See , “Background on Captive Insurance,” INS. INFO. INSTITUTE (Aug. 23, 2023). 6 See , “Captive Insurance 2025 Year in Review: Growth, Risk and Resilience,” by Alex Wright, at https://www.captive.com/news/captive-insur ance-2025-year-in-review-growth-risk-and-re silience (December 19, 2025). 7 “Marketing The Captive Industry, Why Best Practices Are Key,” Captive Insurance Compa nies of America (2022); see here, https://www. cicaworld.com/wp-content/uploads/2022/04/ CICA-50th-MarketingBestPractices-2022.pdf (last visited Apr. 15, 2025). 8 See , https://insurance.ky.gov/ppc/Company/De fault.aspx (last visited Jan. 26, 2026). 9 15 U.S.C. §§ 3901 et seq. 10 KRS 446.010 et seq. 11 See , William Rabb, “After Ten Years, Kentucky’s Troubled School Boards Insurance Trust Has Been Liquidated,” INS. JOURNAL, Dec. 29, 2023, see, https://www.insurancejournal.com/ news/southeast/2023/12/29/753677.htm; see also, https://www.ksba.org/protected/Article View.aspx?iid=53IGU0&dasi=1B (last visited Apr. 15, 2025). 12 Captives by State, Ins. Info. Inst., https://www. iii.org/publications/a-firm-foundation-how-in surance-supports-the-economy/a-50-state-com mitment/captives-by-state (last visited June 20, 2024). 13 See , https://www.captive.com/news/near ly-all-commercial-insurance-lines-saw-pre mium-increases-in-2024 (last visited April 14, law, employee benefits, public law, and tax structuring and planning could serve their clients well by identifying the best mechanism by which an enterprise should own a captive, and then working with the captive manager to prepare the organiza tional documents for that captive program. Establishing a captive also presents a good opportunity to discuss corporate succession planning with one’s client, particularly if it is a closely held business. Owning a captive provides many benefits, including the ability to develop a tailored

24 See , https://www.captive.com/domiciles/tennes see-captive-domicile (last visited Jan. 27, 2026). 25 See , “2024 Marks Fifth Consecutive Year of Cap tive Insurance Growth,” TN DEPT OF COM MERCE & INS (March 28, 2025); see, https:// www.tn.gov/commerce/news/2025/3/28/td ci-2024-marks-fifth-consecutive-year-of-cap tive-insurance-growth.html#:~:text=At%20 the%20end%20of%202024,entities%20from%20 2023%20to%202024 (last visited Apr 15, 2025). 26 See , CAPTIVE INS. COMPANIES OF AMERI CA, https://www.cicaworld.com/domiciles/ken tucky/ (last visited Apr. 15, 2025). 27 See , http://www.kycaptive.com/ (last visited Feb ruary 13, 2026). 28 See , KRS 304.49-090. 29 See , 18 USC 162; see also, Humana, Inc. v. Com missioner, 881 F.2d 247 (6th Cir.); Rent-A-Cen ter v. Commissioner, 142 T.C. 1 (2014); Securitas Holdings, Inc. v. Commissioner, T.C. Memo 14 225 (2014); R.V.I. Guaranty Co., Ltd. v. Commis sioner, 45 T.C. 209 (2015) . 30 Protecting Americans From Tax Hikes Act of 2015 (Div. Q of the Consolidated Appropriations Act, 2016) (P.L. 114-113). 31 See , “IRS Provides Relief for Failure to Disclose Microcaptive Transactions.” TAX NOTES (April 11, 2025). 32 Avrahami v. Commissioner, 149 T.C. 7 (2017); Reserve Mechanical v. Commissioner, T.C. Memo. 2018-86 (2018); Syzygy Ins. v. Commission, T.C. Memo 2019-34 (2019); US v. Keating, T.C. Memo. 2024-2 (2024). 33 See Peter J. Strauss, 3 Ways Captive Insur ance Improves Your Company’s Financial Well-Being, Forbes (Aug. 18, 2017), https:// www.forbes.com/sites/forbesmarket place/2017/08/18/3-ways-captive-insurance-im proves-your-companys-financial-well-being. 34 See Paul Sullivan, Once Scrutinized, An Insur ance Product Becomes a Crisis Lifeline, N.Y. Times (Mar. 20, 2020), https://www.nytimes. com/2020/03/20/your-money/coronavirus-in surance-small-business.html. 35 See Alice Uribe, Captive Insurance Seen as Covid-Era Remedy to Rising Premiums, Wall St. J. (Sept. 27, 2020), https://www.wsj.com/articles/ captive-insurance-seen-as-covid-era-remedy to-rising-premiums-11601208001. cer/general counsel to Alliance Captive Management, LLC, a Tennessee-domiciled captive manager with offices in Kentucky, she was a partner and practice group chair woman in one of Florida’s largest and oldest law firms. She is licensed in Florida and Kentucky; and can be reached at A.Luby@ AllianceCaptiveMgt.com.

21 See , KRS 304.49-110. 22 See , KRS 304.49-010.

23 See , https://www.captive.com/domiciles/ken tucky-captive-domicile (last visited Apr. 15, 2025).

27 bench & bar