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What is Captive Insurance?

A "captive insurance company" is a property and casualty insurance company specifically established to insure the risks of an associated business. Owning your own captive insurance company comes with advantages that help you gain better control over your business’s risk management, earnings, and tax planning. Conventional insurance policies often limit or exclude coverage for certain inherent operational risks.

With captive insurance, these risks can be written right into the policy, free of vague or ambiguous language. Under IRC 831(b), middle market organizations can take advantage of both the primary benefits of captives, including tailor-made risk coverages and secondary benefits, such as improved tax planning. Capstone is the leading alternative risk planning company for the mid-market and we’re continuing our 17-year trend of growth and leadership in the industry. While other captive insurance managers disclaim tax and legal services, we offer a comprehensive alternative risk financing program in collaboration with The Feldman Law Firm LLP. We invite you to explore all the benefits of captive insurance and the turnkey services we provide.
Learn more about forming Captives >>.

Our Latest Blog

  • Captive Resources: Subway, Jared, and the Lessons We’ve Learned
    “What was he thinking?!” It was the question on everyone’s mind when news broke that Subway Corporation’s pitchman Jared Fogle may have had dealings with an unscrupulous associate. Moreover, the national dialogue eventually shifted to include questions about Subway’s future…
Important News You Should Know About
Coca Cola Inversions

More Large U.S. Companies Move Abroad to Cut Taxes

August 26, 2015 (Houston, TX)New Services from Capstone Associated, Houston TX - The Wall Street Journal reports in separate announcements and in unrelated transactions that Coca-Cola Enterprises Inc. ("CCE") and CF Industries Holdings ("CF") move each of their legal headquarters to the U.K. for tax purposes. Get the story here.

In these "inversions," U.S. companies move their legal home abroad. Large U.S. companies have undertaken inversions because of the relatively unattractive U.S. posture faced by multi-national companies. Both companies’ tax rates are expected to land well below the U.S. statutory rate of 35%. Analysts expect CF to face only a 20% tax and CCE 26%-28%.

Capstone administers the design, implementation, and management of captive insurance arrangements, providing exceptional risk coverage for middle market organizations. Middle market businesses may obtain tailored risk coverages and fill in gaps in their existing commercial policies with a captive insurance arrangement. Insurance premiums paid to the captive insurer are made on a tax-deductible basis.

For more information on Capstone's 17-year work history in forming and operating captive insurance companies, please contact a member of its executive team at 800.705.4014

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Captives in the IRS' Dirty Dozen List of Abusive Tax Schemes? Get the Facts
February 10, 2015 (HOUSTON, TX) - In the first quarter of each year, the IRS increases the volume of its press releases in a thoughtfully designed program to spur taxpayer compliance with our income tax system. This is a well-reasoned effort by the IRS.

Gallagher Captive Manager Artex discloses it's subject to IRS probe
Artex Risk Solutions Inc., the Bermuda-based captive management subsidiary of insurance broker Arthur J. Gallagher & Co., has confirmed that it is involved in an Internal Revenue Service probe into captive insurers formed under 831(b) of the Internal Revenue Code.

September 10, 2014 Federal Court Opinion Ordering Artex's Compliance with IRS Subpoena
The Internal Revenue Service (IRS) is conducting an investigation of Respondent Artex Risk Solutions, Inc. (Artex). The IRS is allegedly
examining Artex’s role in transactions involving captive insurance plans under 26 U.S.C. § 831, and investigating whether such transactions constitute abusive transactions.

Artex Docket Report
Petition to enforce IRS summons filed by United States of America (Shoemaker, Martin) (Entered: 06/03/2014).

Self Insurance vs. Captive Insurance
Captive insurance is a way to couple the benefits of self-insurance with the benefits of traditional insurance. A captive insurer is an insurance company formed by an operating business to insure its risks. Captive insurance companies are licensed by the department of insurance in the jurisdiction in which they are formed. They write insurance policies covering specified risks of the operating business. The operating business pays tax deductible insurance premiums to the captive insurer in exchange for the policy coverage.

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Power 50 captive Insurance award

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Captive Insurance Article
Experts from Capstone Associated Services and The Feldman Law Firm LLP weigh in on the true function of captive insurance. Controversies and misconceptions about the alternative risk management strategy are discussed in full detail.