The Corporate Transparency Act is officially here, with significant implications for businesses nationwide. This new law aims to enhance corporate accountability by requiring certain companies to report their beneficial ownership information to the Financial Crimes Enforcement Network. Those reports must be submitted no later than January 1, 2025. But who is required to submit these reports?
What is a reporting company? Under the CTA, a “reporting company” includes:
- corporations,
- limited liability companies, and
- similar entities that are created by filing formation documents with a Secretary of State or equivalent authority.
Who needs to comply?
However, not all entities are required to comply. The law includes exemptions for organizations that already are regulated heavily at the federal or state level—as they already disclose ownership information to the government.
Key exemption for insurance agencies and producers
Good news for PIA members: insurance agencies and producers are exempt from the reporting requirements under the CTA. Specifically, the law’s 13th exemption applies to state-licensed insurance producers.
This exemption covers any entity that:
- is licensed and supervised by a state insurance commissioner or similar regulatory authority, and
- maintains a physical office in the United States.
This carve-out recognizes the rigorous regulatory oversight already in place for insurance professionals, and it ensures that they won’t be burdened with duplicative reporting requirements.
Why it matters to PIA members
While many industries will need to adapt to the CTA’s compliance demands, most insurance agencies and producers can breathe easy, knowing they fall under this important exemption.
However, it’s crucial to stay informed and ensure your agency meets the exemption criteria. If you have any questions about this new law, PIA Northeast members can contact PIA at (800) 424-4244 or via email at resourcecenter@pia.org.
Bradford J. Lachut, Esq.
Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.
