Captive Insurance Management Services
Chandler & Knowles CPAs offers guidance and management of taxes, estates and risk through captive insurance companies. Captive insurance can play a key role in risk and asset management for businesses and business owners.
What Is Captive Insurance?
A captive insurance company is a company that is owned and controlled by the insureds themselves with the help of an accountant and legal counsel. Captive companies make up part of the Alternative Risk Transfer (ART) market, and they are slowly becoming more popular. They have been around since the 1960s, but most captive companies were formed offshore. Now over half of them are established in the U.S. Traditionally, the vast majority of captive companies were only held by large corporations such as fortune 500 companies. Today, more small and medium sized businesses are taking advantage of the benefits owning a captive has to offer.
Captive insurance is not backed up by state guaranty funds like commercial insurance companies, and there aren’t as many regulations to protect the insured from the insurer, but the insureds of a captive insurer have more control over policies and reap a distinct set of benefits. Commercial insurance doesn’t always cover certain risks that business owners could possibly face. Captive insurance companies can also provide better legal benefits.
Different types of captive companies have emerged over the years including pure captives, sponsored captives, group captives, risk retention groups and rent-a-captives among others. All have their individual benefits and serve different types of businesses and individuals.
What Are the Benefits of Captive Insurance?
- Custom Coverage -- Captive insurance companies don’t usually offer cookie-cutter insurance packages. They are made to fit each company’s or business owner’s needs. Owners of captive companies can set their own exclusions and criteria for covering claims which are far more flexible and less restrictive than those of commercial insurance companies.
- Save on Insurance Premiums -- Because those who participate in a captive offer their own capital as coverage and/or set their own premiums, they avoid paying high premiums for the high expenses and level of profit that commercial insurance companies have to maintain.
- Tax Benefits -- Depending on the type of captive company that is formed, there are several possible tax benefits. Moving money to captives in the form of premiums, gives businesses or owners a tax break based on these premiums. Money paid into a captive is also exempt from gift and estate taxes. Captives can also provide additional income tax savings.
Take advantage of the financial benefits captive insurance has to offer. Contact Chandler & Knowles CPAs for captive insurance management services. Give us a call at 817-430-3000 to set up an appointment at our Flower Mound office or you can fill out our online contact form and one of our representatives will be happy to contact you regarding your insurance needs.
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