Captive Insurance - AWM Global Advisors

Transcription

Captive Insurance - AWM Global Advisors
Enhanced
Risk Management
Strategies for
Business Owners
Captive
Insurance
A Captive Insurance Company
(“CIC”) is a form of self-insurance
where a captive subsidiary company
is created to provide property and
casualty insurance for the parent
operating company.
DOES IT MAKES SENSE FOR YOUR BUSINESS?
A CIC may allow the operating company to capture costs normally lost to third party
insurers, better manage enterprise risk and reduce insurance costs via direct access to
the wholesale reinsurance market.
Premiums up to $1.2 million per year paid to the captive are tax deductible. Each year
adjustment for claims payments and expenses are taken against the premium received,
and the net underwriting profits are retained in the CIC’s surplus account, where they can
be managed in a tax efficient manner.
Assets should be maintained in
the captive for at least 7 years.
Surplus capital accumulated
over the years can be
distributed to the owners as
dividends or long term capital
gains, or ownership interest
can be passed to heirs and
thus kept outside of the owner’s
estate. Shares in the captive
can be offered as an incentive
to new recruits.
BASIC CAPTIVE STRUCTURE
OWNERSHIP
GROUP
“Owner”
OPERATING
BUSINESS
“Insured”
Policy Coverage
Insurance Premiums
CAPTIVE
INSURANCE
COMPANY
“Captive”
POTENTIAL BENEFITS OF CAPTIVES
MINIMIZE
COST
• Reduce Insurance
Costs
• Capture
Underwriting Profit
• Pricing
Sustainability
750 B. STREET | SAN DIEGO, CA 92101
OFFICE: (619)225-7600
EMAIL: AWM@AWMGA.COM
WWW.AWMGA.COM
RISK
MANAGEMENT
•
•
•
•
•
Greater Claims Control
Increase Capacity
Increase Coverage
Underwriting Flexibility
Access Reinsurance
Market
• Incentives for
Loss Control
IMPROVE
CASH FLOW
WEALTH
ACCUMULATION
• Retain Premium
Dollars
• Estate Planning
• Tax Benefits
• Asset Protection
• Investment Income
Potential
• Asset Growth
• Additional Profit
Center
Potential
For additional information or for a complimentary financial consultation, please contact us.
AWM Global Advisors is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered, or is excluded or
exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has
attained a particular level of skill or ability. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be
regarded as a complete analysis of the subjects discussed. All investment strategies have the potential for profit loss. Always consult an attorney or tax professional
regarding your specific legal or tax situation. AWM Global Advisors is not engaged in the practice of law or accounting.