What Is a 953(d) Election and Why Did We Do It?

The Internal Revenue Code 953(d) authorizes non-US-based life insurance companies to elect to be treated and taxed the same as US-based life insurance companies. Castle Re made such an election and it files a 1120L annual corporate tax return with the IRS properly reporting all of its earnings.

So, you might ask why Castle Re would elect to be subject to US corporate income taxation?

Castle Re made such an election for three reasons:

  1. You, the customer, do not need to pay the 1% of premium excise tax of (IRC 4371-4374) if Castle Re has elected 953(d) status – a huge savings resulting in more of your investment dollars remaining in the policy and growing tax deferred.
  2. Castle Re follows all of the tax rules. Simply stated, it works best for customers and Castle Re that Castle Re be fully compliant and in the US corporate tax system adhering to all rules and regulations – in other words, no monkey business with the IRS.
  3. The law and tax backgrounds of the founders of Castle Re result in a philosophy and approach of complete and above board tax compliance giving customers a better peace of mind regarding tax issues and legitimate tax planning.