Law360, New York (January 28, 2016, 4:21 PM EST) -- On Dec. 23, 2015, the Internal Revenue Service released Revenue Ruling 2016-03 (the ruling), which provides that the Service will no longer apply the excise tax imposed on insurance and reinsurance agreements under Section 4371 of the Internal Revenue Code to reinsurance and retrocession[1] agreements between two foreign insurers or reinsurers, except in certain limited cases. The ruling revokes Revenue Ruling 2008-15 (the prior ruling), which described certain situations in which the excise tax would apply to foreign to foreign reinsurance and retrocession agreements.[2] The Service reconsidered the position taken in the prior ruling in light of the recent decision of the United States Court of Appeals for the District of Columbia Circuit in Validus Reinsurance Ltd. v. United States,[3] which held that the excise tax does not apply to wholly foreign retrocession agreements. However, the ruling is broader than the decision in Validus in that the ruling addresses reinsurance agreements in addition to retrocession agreements....