Captive Insurance Experts

Interested In Captive Insurance Planning & Setup?

Then You Want To Talk To The Experts!

 

A Captive Insurance Company (CIC) is an insurance company that insures the risks of its owners, hence the name “captive”.  If the CIC losses and expenses are low, then the CIC owners make money.  A CIC is a real insurance company licensed in a jurisdiction (called a “domicile”) that is favorable to the regulation and expense of operating a CIC, such as North Carolina.  The CIC must be properly capitalized and operated like a legitimate insurance company, such as having binding, written policies, paying claims, maintaining reserves, etc.

For an operating business that self-insures many risks every day, a Captive Insurance Company can address the financing of these risks in a manner that saves substantial income taxes and adds to the bottom line.

Setting up your CIC can be complex and confusing, but Webb & Morton are founding members of the North Carolina Captive Insurance Association and have been active in captive insurance work since before N.C. became a domicile in 2013.  N.C. has been very successful as a domicile and won the “Domicile of the Year” in 2020 from Captive Review.

Captive Insurance Company Benefits:

Non-Tax:

• Reduce your risk of loss from uninsured exposures
• Reduce the cost of insurance for high-risk concerns
• Freedom to insure any risk and to customize the terms of its policies
• Direct access to reinsurance markets
• Capture underwriting profit

Tax:

• Reduce your taxes owed while creating protected reserves for future events
• Premiums paid by the insured entity(ies) are tax deductible
• Premiums collected by the CIC are tax exempt (under IRC Sec. 831(b))
• CIC payouts are taxed at qualified dividend or long-term capital gains rates

If you are interested in learning whether this planning can be beneficial to your company, then please contact us.