Fifth Circuit upholds findings on microcaptive risk distribution

The U.S. Court of Appeals for the Fifth Circuit addressed key issues in the case of Swift v. CIR concerning microcaptive insurance arrangements. The court's ruling clarified the concept of risk distribution, which is crucial for determining if a microcaptive can be classified and operate as an insurance company. In the case of Swift, the judges analyzed whether the arrangement in question adhered to established insurance principles, specifically regarding the distribution of risk. This decision followed extensive debate within the judicial system regarding how risk should be evaluated to meet insurance criteria.