Company: OXBRW
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001641172-25-000736
Chunk: 425

Company: OXBRIDGE RE HOLDINGS Ltd
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 425
---
 PFIC, in which case a U.S. holder of our ordinary shares should be subject to disadvantageous rules under U.S. federal
income tax laws.

Significant
potential adverse United States federal income tax consequences generally apply to any United States person who owns shares in a “passive
foreign investment company”, or PFIC. In general, a non-U.S. corporation is classified as a PFIC for a taxable year in which, after
taking into account the income and assets of the corporation and certain subsidiaries pursuant to certain look-through rules, either
(i) 75% or more of its gross income is passive income, or (ii) 50% or more of the average quarterly value of its gross assets is attributable
to assets that produce passive income or are held for the production of passive income.

Passive
income generally includes interest, dividends and other investment income. However, the income derived in the active conduct of an insurance
business is excluded from the term “passive income” if (i) for years before 2021, the income is earned by a corporation that
is predominantly engaged in an insurance business, and (ii) for years after 2021, the income is earned by a “qualifying insurance
corporation”. In order for a non-U.S. property and casualty insurance company to be treated as a “qualifying insurance corporation”
for a taxable year, the company’s “applicable insurance liabilities” generally must be greater than 25% of the company’s
assets for the taxable year. In the case of a non-U.S. property and casualty insurance company, the term “applicable insurance
liabilities” means the amount of loss and loss adjustment expenses, but shall not exceed the amount reported to the applicable
regulator in an applicable financial statement. It is not clear whether the term “applicable insurance liabilities” includes
not only the unpaid loss and loss adjustment expenses, but also includes the paid loss and loss adjustment expenses during the taxable
year. If each of Oxbridge Reinsurance Limited and Oxbridge Re NS is a “qualified insurance corporation” for a taxable year,
then neither Oxbridge Re Holdings Limited, nor Oxbridge Reinsurance Limited, nor Oxbridge Re NS should be deemed to be a PFIC for the
taxable year.

Regardless
of whether the term “applicable insurance liabilities” includes not only the unpaid loss and loss adjustment expenses but
also the paid loss and loss adjustment expenses, we believe that each of Oxbridge Reinsurance Limited