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

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

However, just days later, the Treasury Department announced a major shift in enforcement. On March 2, 2025, the Treasury stated that it would not enforce any penalties or fines associated with BOI reporting under the existing deadlines. Additionally, it clarified that once forthcoming rule changes take effect, U.S. citizens and domestic reporting companies will not be subject to enforcement actions related to BOI reporting. Treasury also plans to issue a proposed rulemaking that will limit the scope of the rule to foreign reporting companies only. U.S. Secretary of the Treasury Scott Bessent called this decision “a victory for common sense,” aligning with broader efforts to ease regulatory burdens on small businesses.

Insurance Agencies Are Exempt

Insurance agencies are exempt from the CTA’s reporting requirements. Currently, there are 23 specific exemptions, and “state-licensed insurance producers” fall within them. This exemption applies to any entity that:

(A) Is an insurance producer authorized by a state and subject to supervision by the state’s insurance commissioner or a similar regulatory body, and
(B) Has an operating presence at a physical office within the United States.

This definition is quite broad. If your state regulates insurance, requires you to have a license, and you have a physical office in the U.S., then you are exempt.

• Have a license and work in a large office in a high-rise? You’re exempt.
• Operate from a home office and meet clients at coffee shops? You’re also exempt—as long as your state regulates insurance.

It’s worth noting that this exemption for insurance agencies exists because of 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 advocating for insurance agents on this issue, and your membership dues help support efforts like this.

Your Clients May Be Affected

While insurance agencies are exempt, many of your clients may not be.

Although insurance agents don’t typically provide legal or financial advice beyond insurance matters, we all know that agents (along with attorneys and accountants) often serve as trusted advisors. That’s why it’s important to be aware that many of your clients may be required to submit BOI information to FinCEN to comply with the CTA.

There are 23 exemptions to the CTA’s reporting requirements, and some clients may qualify for one. However, most businesses will need to report BOI information. If you want to learn more, numerous articles and resources outline these exemptions and which businesses are subject to the CTA.

Key Takeaway

• Your insurance agency does not need to report BOI information.
• Many of your clients might need to, with a reporting deadline of March 21, 2025.
• Legislative efforts are underway to delay or eliminate the CTA’s reporting requirements, but none have been enacted into law yet.
• The Treasury Department has announced a suspension of enforcement and plans to narrow the rule’s scope to foreign reporting companies.

For now, simply be aware that while you’re exempt, your clients may need to take action. If they have questions, encourage them to seek guidance to ensure compliance.

About the Author: Beth Smoller is the Chief Operating Officer and General Counsel at Kansas Association of Insurance Agents. Kansas Association of Insurance Agents (KAIA) is dedicated to promoting and advancing the interests of the independent insurance system. Founded in 1920, KAIA represents more than 500 independent insurance agencies and branches across the state.