What is an “Insurance Company”?
The definition of an insurance company varies widely among the states. Many states conform to the Internal Revenue Code definition of insurance company, while others specifically adopt and incorporate their own definition of the term into their statutes and regulations. For example, Illinois specifically conforms to the Internal Revenue Code definition of insurance company and generally follows the federal income tax treatment of insurance companies, as set out in Internal Revenue Code Sections 801 through 848. On the other hand, California, via the California Constitution, adopts its own definition of what constitutes an “insurer” for California Franchise Tax Purposes. California Constitution Article XIII, Section 28(a) indicates, in pertinent part, that the term “insurer” includes “insurance companies or associations and reciprocal or interinsurance exchanges together with their corporate or other attorneys in fact….” Therefore, since the definition of “insurance company” varies wide
