federal excise tax FET
The federal excise tax is a tax imposed on premium payments to offshore insurers: 4 percent on direct premiums and 1 percent on reinsurance premiums.
Additional Information
It was once relaxed for premium payments to most offshore insurers/reinsurers in Barbados and Bermuda, but not for long. It can be eliminated if the captive makes an election to be taxed as a US corporation or if the transaction is not really insurance (i.e., not claiming premium deductibility) but argued to be a transfer of self-insurance reserves.
