CTA Reporting Requirements Reinstated

Independent Agencies Remain Exempt thanks to Big “I” Efforts

A recent ruling in a federal court in Texas has reinstated the Corporate Transparency Act’s (“CTA”) reporting requirements.  The reporting requirements have been a moving target for several months as litigation has moved through the legal system.

On Feb. 18, 2025, the U.S. District Court for the Eastern District of Texas issued a ruling that reinstated the CTA’s directive that certain reporting companies submit Beneficial Ownership Information (“BOI”) to the Financial Crimes Enforcement Network (“FinCEN”).

I’ll spare you all the legal details with injunctions and stays and appeals. There are two important takeaways for you from this ruling.

First, insurance agencies are exempt from the CTA’s reporting requirements.  There are currently 23 enumerated exemptions to the CTA and “state-licensed insurance producers” are one of the exemptions.  That term is any entity that: “(A) is an insurance producer that is authorized by a State and subject to supervision by the insurance commissioner or a similar official or agency of a State, and (B) has an operating presence at a physical office within the United State.”

That’s a pretty broad definition.  As long as the state where you live regulates insurance and requires you to have a license of some kind and you have a physical office in the U.S. then you are exempt! Got a license a big office in a high rise? Then you are exempt.  Got a home office and you meet clients in coffee shops? You are also exempt, if your home state regulates insurance.  Before I move on from the exemption, you should know the exemption for insurance agencies exists due to the lobbying efforts of the Independent Insurance Agents and Brokers Association (“IIABA” or the “Big I”). Nathan Riedel and his team were the only trade association representing agents to lobby on our behalf and your membership dues help support efforts such as this.

Since insurance agencies are exempt, what you really need to know is the CTA’s mandatory reporting requirements may impact your clients.  While I am certain you don’t give any advice that falls outside of the insurance arena, I’m a pragmatist and I am fully aware of the breadth of advice insurance agents (and attorneys and accountants) may give to clients.  To that end, you simply need to know your clients may need to submit BOI information to FinCEN in order to comply with the CTA.

There are 23 exemptions to the CTA’s reporting requirements and your client may fall within one of those exemptions.  However, most companies will need to report BOI information to FinCEN.  If you want to know more, there are a plethora of articles and websites that outline the 23 exemptions to the CTA. You can also learn more about the types of companies that fall under the CTA.

For now, know that your insurance agency does not need to reporting any BOI information and your clients may need to report it.  If they need to report, the deadline is March 21, 2025. However, FinCEN has said it will not assess any penalties for failing to meet the March 21 deadline as it works on a new, interim rule. So, your clients may need to submit BOI information at some and they can certainly do it before March 21, 2025.  If they don’t submit it before March 21, they won’t be assessed a penalty because FinCEN is still finalizing its rule regarding the BOI reporting requirement.