• 831(b) A captive is a captive that may be taxed under U.S. Internal Revenue Code § 831(b), which provides that a captive taxed as a U.S. insurance company may only pay tax on investment income in the year in which in which his insurance premium is registered. is at or below the threshold for the applicable tax year, which was set at $2.2 million or less in 2017, and the premium cap may be adjusted for inflation. Such captives are also known as “microcaptives”.