Election To Be Treated as a Qualifying Insurance Corporation

• The foreign corporation (or its foreign parent corporation on its behalf) makes a publicly available statement (such as in a public filing, disclosure statement, or other notice provided to U.S. persons that are shareholders of the foreign corporation) that it satisfied the requirements of section 1297(f)(2) and Regulations section 1.1297-4(d)(1) during the foreign corporation's applicable reporting period (as defined in Regulations section 1.1297-4(f)(4)). This publicly available statement must include the same three items noted in the first bulleted item above. However, a shareholder may not rely upon the foreign corporation’s statement described in this bullet if the U.S. person knows or has reason to know based upon reasonably accessible information that the statement was incorrect.

Note: The final regulations do not require the U.S. person to attach a copy of either of the above statements to Form 8621. See Regulations section 1.1297-4(d)(5).

When to make the election. Generally, the shareholder must make this election by the due date, including extensions, of the U.S. person’s tax return for the tax year for which the taxpayer is relying on the alternative facts and circumstances test within the meaning of section 1297(f)(2) and Regulations section 1.1297-4(d) to meet the definition of a qualifying insurance corporation. A U.S. person can attach the Form 8621 to an amended return for the tax year of the U.S. person to which the election relates if the U.S. person can demonstrate that the reason for not filing the form with its original return was due to reasonable cause.

Who may make the election. A U.S. person that is a shareholder (or holds an option to purchase stock) of a corporation that fails to qualify as a qualifying insurance corporation (QIC) (as defined in section 1297(f)(1)) solely because its applicable insurance liabilities make up 25% or less of its total assets may elect to treat the stock as stock of a qualifying insurance corporation under the alternative facts and circumstances test set forth in section 1297(f)(2) and Regulations section 1.1297-4(d) if:

1. The foreign corporation’s applicable insurance liabilities make up at least 10% of its total assets; and

2. Based on the applicable facts and circumstances, the foreign corporation is predominantly engaged in an insurance business, and its failure to satisfy the 25% threshold is due solely to runoff-related or rating-related circumstances involving such insurance business.

The U.S. shareholder may make the election under section 1297(f)(2) for its tax year if:

• The foreign corporation directly provides the shareholder a statement, signed by a responsible officer of the foreign corporation or an authorized representative of the foreign corporation, that the foreign corporation satisfied the requirements of section 1297(f)(2) and Regulations section 1.1297-4(d)(1) during the foreign corporation's applicable reporting period (as defined in Regulations section 1.1297-4(f)(4)). Specifically, if the foreign corporation failed to qualify as a QIC under section 1297(f)(1) solely because the ratio of applicable insurance liabilities to total assets for the tax year is 25% or less, the statement must (1) indicate that the ratio was at least 10%, along with a calculation of the ratio (with the resultant ratio double underlined); (2) include a statement indicating whether the failure to satisfy the 25% test was the result of runoff-related or rating-related circumstances, along with a brief description of those circumstances; and (3) include information that establishes that the foreign corporation has met the “predominantly engaged in an insurance business” requirement described in Regulations section 1.1297-4(d)(2).

How to make the election. Follow these steps to make the election.

1. Check the box on page 1 of Form 8621.
2. Provide the identifying information for the U.S. person and the foreign corporation (Name, Address, Identifying Number (if any)) only. You do not have to complete any other part of the Form 8621 if you are only filing the form to make this election.

Deemed election for publicly traded companies. A U.S. person who owns publicly traded stock in a foreign corporation will be deemed to make the election under section 1297(f)(2) with respect to the foreign corporation and its subsidiaries if the following requirements are satisfied.

• The stock of the foreign corporation that is owned by the U.S. person (including stock owned indirectly) has a value of $25,000 or less ($50,000 or less in the case of a joint return) on the last day of the U.S. person's tax year and on any day during the tax year on which the U.S. person disposes of stock of the foreign corporation; and

• If the U.S. person owns stock of the foreign corporation indirectly through a domestic partnership, domestic trust, domestic estate, or S corporation (a domestic pass-through entity), the stock of the foreign corporation that is owned by the domestic pass-through entity has a value of $25,000 or less on the last day of the tax year of the domestic pass-through entity that ends with or within the U.S. person's tax year and on any day during the tax year of the domestic pass-through entity on which it disposes of stock of the foreign corporation.

4 Instructions for Form 8621 (Rev. 12-2025)

For these purposes, stock is publicly traded if it would be treated as marketable stock within the meaning of section 1296(e) and Regulations section 1.1296-2 (without regard to Regulations section 1.1296-2(d)) if the election under section 1297(f)(2) is not made.