If you’re curious about captives, it may be beneficial to consider a Risk Retention Group (RRG). RRGs are member-owned liability insurance companies and are an alternative to risk transfer entities formed under the federal Liability Risk Retention Act (LRRA) of 1986. While RRGs are regulated either under captive insurance statutes or traditional insurance laws, they [...]
The IRS has announced acceptance rates for a time-limited settlement offer made to certain taxpayers under audit who participated in abusive micro-captive insurance transactions. Nearly 80% of taxpayers who received offer letters elected to accept the settlement terms. The settlement offer followed three U.S. Tax Court decisions confirming that certain micro-captive arrangements are not eligible [...]
Captive insurance companies have continued their march to the mainstream in recent years as more and more companies look for risk management solutions. As these companies begin taking advantage of captive benefits, they must remember that captives are insurance companies and proper governance is paramount. In doing so, the composition and operations of a captive [...]
Not all organizations are good candidates for the formation of a captive insurance company. In most cases, captives tend to make the most sense for organizations that; are comfortable with managing their risks internally are comfortable with the retention of certain levels of risk have competent risk management professionals in place to lead the captive [...]
What is a captive insurance company? This is a common question and one that can be answered in many different ways, as there are numerous different captive programs and structuring options. Perhaps the simplest definition for a captive insurance company is an insurance company that is owned by its insured(s). Captives are real insurance companies [...]
Healthcare provider captive insurance arrangements represent approximately 15% of the global captive insurance market and are currently one of the largest growing sectors within the captive industry due to the changing risk landscape that healthcare organizations are facing. Approximately 75% of hospitals now have some form of alternative risk management in place for their professional [...]
A captive insurance company (or “captive”) is a licensed insurer generally established to meet the risk management needs of a specific company or group of companies. Captive structures are primarily formed either to supplement existing insurance coverages, fund blocks of risk exposures, or provide coverage for atypical risks. Utilizing captive programs enables businesses to manage [...]
In December 2015, the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) passed and increased the previous premium limitation from $1.2 million to $2.2 million—beginning after 2016. It also added an annual adjustment for inflation to the premium limitation. As a part of the inflation adjustments for 2018, the IRS increased the 2018 [...]
What comes to mind when someone talks to you about forming a captive? If your mind immediately goes to protecting yourself from marauding pirates, then - believe it or not - you’re on the right track! What we’re really talking about is captive insurance companies, and they are believed to have originated with ship owners [...]
