Captive Insurance
HR Companies is pleased to offer Captive Insurance Companies as part of our package of advanced planning tools, which offers exciting planning capabilities and stratigic flexibility to small, closely held businesses. Utilization of a Captive for small to medium-sized companies offers and extensionof Tax Efficient Business Strategies© beyond qualified plans with benefits including:
- Potential lower cost of insurance
- Broader insurance coverage
- Potential underwriting gains
- New profit center
- Tax savings - Federal and State
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- Asset protection
- Wealth accumulation
- Wealth transfer
- Owner Control
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What is a Captive?
A captive is an insurance company organized primarily for the purpose of insuring or re-insuring the liabilities of its owner (parent).
Types of Captives:
- Standard - a single parent entity for the express purposes cited above.
- "Rent-a-Captive" - a multiple parent (owner) entity designed to insure the risk of others for a fee
Purpose of Captives:
- Reduce casualty insurance premiums
- Fill in gaps in coverage, exclusions, deductibles and difference in conditions
- Deductible premiums
- Tax deferred accumulations
- Conversion to LTCG/dividend rates
Jurisdictions:
With the exception of minor differences in costs, the precise legal jsuridiciton does not effect the overall purposes and uses of a captive arrangement.
- Domestic - there are several states in which captives might be formed including Vermont, DC, Arizona, Utah and Hawaii
- International - the leading jurisdicition include Bermuda, Cayman Islands, Guernsey, BVI, Barbados, Turks & Caicos and Isle of Man
Regulatory/Compliance:
- Ample guidance form the IRS via Notices and Rev. Rulings
- Lengthy list of case law
- Adequate reporting capability to ensure compliance
Implementation/Operation:
- Turnkey delivery
- Complete administrative support including:
- Compliance management
- Full reporting for regulatory and taxation
- Annual review for on-going maintenance
Role of HR Companies:
- CIC structuring - addition of entity, asset and legacy planning
- Family office structuring - running your wealth like a business
- International business, asset and investment structures
Elite Strategy Team:
- Over 100 years of combined legal and technical experience
- Superior case design analysis
- Case design, strategic structuring, implementation and ongoing maintenance
- Total achievement of client goals and long-term peace of mind
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