Key takeaways

• New proposed regulations confirm that assets held by a non-U.S. insurance company to meet obligations under its insurance contracts are nonpassive for PFIC purposes, but do not provide specific guidelines for determining the portion of assets held for this purpose.
• Under the proposed regulations, to qualify for the exception for active insurance businesses, a non-U.S. insurance company’s own officers and employees must carry on substantial business activities.
• The IRS has solicited comments on methods for determining whether assets are held to meet obligations under insurance contracts.