What tax advantages do insurance companies receive?

apparently, insurance companies receive tax advantages over normal corporations. this is apparently why berkshire hathaway uses insurance companies to buy preferred dividends and other investments. i dont know what those advantages are. please help.

Insurance companies are structured similarly to a bank in that they take in money in the form of premiums and can invest that money until policyholders make claims and need to be paid. In the meantime, the insurance company gets free use of the insurance premiums and keeps whatever earnings they get from those investments, net of taxes.

Until an insurance policy is either cancelled or expires, the premiums for those policies are held as unearned premiums and taxes don't need to be paid yet. After the policy is no longer in force, the company then reports the premiums as income (net of any expenses) and pays taxes on this, as they become earned premiums (similar to earned income on your personal tax return).

In a long-term policy, such as a life insurance policy, it might be years before the insurance company pays any taxes on the money paid as premiums. Until then, the insurance company can keep reinvesting that money for profit each and every year, although it does have to pay taxes on the gains made on that money if it's taxable income or capital gains.

1) i don't know.

2) i suspect that when they take in premiums, they state that the intent is to pay those back at some point. thus, there's no income tax on them.

how's that for a guess?