Captive insurance companies, insurance companies owned by persons related to the insureds, have long served as an important risk management tool for businesses as varied as Sears and The New York Times. In recent years, there has been an explosion of “micro-captive” insurance companies, companies with premiums that do not exceed $1.2 million in a year. Until 2017, $1.2 million was the allowable maximum amount of premiums for an insurance company to elect favorable tax treatment under I.R.C. § 831(b), allowing the small insurance company to be taxed only on its investment income. The IRS believes that these “831(b)” micro-captives are often used as tax-shelters rather than for legitimate business purposes.