August 20, 2018

Overview of IRS 199A Pass-Through Proposed Tax Regulations

Earlier this month, the IRS issued proposed regulations that would implement and interpret the new Section 199A provisions enacted as part of the tax reform act. Section 199A generally allows eligible owners of “pass-through” entities (sole proprietors, LLC and partnerships) to take an extra 20 percent deduction from the income they receive from such entities.

The most significant interpretive issue for Council members was the scope of the “Specified Service Trade or Business” (“SSTB”) exception to 199A eligibility for higher income earners. In a significant win for The Council, the proposed rules exclude insurance agency and brokerage services from the scope of the term “Brokerage Services,” which is one of the core categories of SSTBs under the statute.

Get the details.

 

Save the Date: Dive In on Diversity & Inclusion

Plan to join us at The Council’s office in DC for a special diversity and inclusivity program and breakfast on September 25 from 9:00 a.m. – 11:00 a.m. to celebrate the 2018 Dive In Festival.

Dive In is the insurance industry’s largest international diversity and inclusion festival. It’s taking place in 32 cities across 27 countries, and The Council is hosting this exclusive event in conjunction with the worldwide festival.

Diverse and inclusive workplaces are becoming a business fundamental in creating better productivity and team performance, laying the groundwork for inspiring innovation, reflecting the values of our global customer base, helping attract and retain the brightest talent and boosting reputation for bold businesses.

With free events hosted in cities all across the United States and the globe, Dive In is helping insurance get fit for the future, highlighting the business case for diverse and inclusive workplaces and providing practical ideas and inspiration for how to bring about positive change.

Registration information coming soon. We hope you can join us!

Blunting the Impact of Naysayers

Are negative personalities in your organization causing more disruption than you think?

Find out.

 

REMINDER: September 3 is NYSDFS Cybersecurity Regulation Compliance Deadline

Under the New York State Department of Financial Services’ (NYSDFS) cybersecurity regulation, covered entities are required by September 3, 2018, to be in compliance with: (1) audit trail requirements, (2) application security requirements, (3) limitations on data retention, (4) certain monitoring requirements, and (5) encryption requirements.

First, non-exempt covered entities must maintain, to the extent applicable and based on their risk assessments, audit trails designed to reconstruct material financial transactions sufficient to support normal operations and obligations of the covered entity, and audit trails designed to detect and respond to cybersecurity events that have a reasonable likelihood of materially harming any material part of the normal operations of the entity (§ 500.06).

Second, non-exempt covered entities must have written procedures, guidelines, and standards designed to ensure the use of secure development practices for their own applications, and procedures for evaluating, assessing, or testing the security of externally developed applications (§ 500.08).

Third, all covered entities must implement policies and procedures for the secure disposal on a periodic basis of any nonpublic information that is no longer necessary for business operations, except where such information must be retained by law or regulation, or where such disposal is not reasonably feasible due to the manner in which it is maintained (§ 500.13).

Fourth, non-exempt covered entities must implement risk-based policies, procedures, and controls designed to monitor “authorized users,” detect unauthorized access, and the use of or tampering with nonpublic information (§ 500.14(a)).

Fifth, non-exempt covered entities must encrypt all nonpublic information, both in transit and at rest.  If this is infeasible, the entity may instead secure its nonpublic information using effective alternative compensating controls approved by the Chief Information Security Officer (CISO) and annually reviewed (§ 500.15).

Furthermore, by March 1, 2019, covered entities must be in compliance with Third Party Service Provider policy requirements (§ 500.11).

For a complete description of the regulation’s requirements and exemptions, click here.

 

Claims Adjustment

More than half of the insurance industry expects to add staff this year but not without a big struggle. As older workers retire, many companies are scrambling to find enough people to replace them,

especially in claims processing.

 

Joel Wood, SVP, Government Affairs
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