Captive Insurance 101
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" 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 captives, 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 CAP_YEARS_NUMBER-year trend of growth and leadership in the industry. While other captive 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 forming captives and the turnkey services we provide.
Learn more about forming Captives >>.
Our Latest Blog
- Construction Insurance in the Wake of a Recession It’s a collective nostalgia…photographs with guys, dirty-faced hanging out on high beams; the hard hats, the grit…the pride. For decades, construction in the United States showed the world that our relatively new nation…
October 6, 2016 (Houston, TX) – The Wall Street Journal reports that democratic nominee and presidential contender Hillary Clinton is proposing stiffer estate taxes. Clinton's proposal includes a 65% tax on the largest estates, up from the current 40% rate.
Clinton is also pushing for the elimination of the “step-up in basis” rule. Currently, persons inheriting appreciated assets do not pay capital gains taxes on the increase in value of such assets during the lifetime of the decedent. The heirs pay taxes only when they sell the assets. Thus, under the current rules, capital gains taxes are paid only on the difference between the sales price and the value of the assets when they were inherited. Get the full story. Read more.
Jeff Simpson/Gordon, Fournaris Client Suffers $4 Million Defeat
November 11, 2015 (Wilmington, DE) - PoolRe Insurance Corp. and others announce the settlement of a long-running case against Organizational Strategies, Inc., a defense contractor based in Virginia. The settlement, concluded in the last few days, paid in excess of $2.2 million to PoolRe and others by OSI and its owners, Nicolette and William Hendricks.
Captives in the IRS' Dirty Dozen List of Abusive Tax Schemes? Get the Facts
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).
7 Ways Businesses are Using Captive Insurance
Are Captives…Legit? In a word, yes. Captive insurance companies are real, bona fide insurance companies formed to insure the risks of a specific “parent” or affiliated business. And just like with any other insurance company, premiums are paid to the captive to cover potential losses.
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.
Learn About Captives - Captive Insurance 101
Captive insurance, as an alternative risk planning strategy, is gaining significant ground among middle market organizations. In this piece, you’ll receive an overview of the various benefits that captives can offer, along with information about the different types of captives that can be formed.
Definition and Benefits of Captive Insurance Companies
Captive insurance companies are those which are founded for the purpose of financing risks which flow out from their parent groups, which may in some cases also include insuring risks associated with the parent groups’ customers.
Best Alternative Risk Management Tool?
Identifying risks within an organization is half the battle. Mitigating these risks and protecting business assets in the event of a threat requires outside-the-box thinking and reliable support. Alternative risk management solutions have become more prominent in recent years as business owners look to cover their inherent risks without the fear of exclusions.
In this Q&A session, Lance McNeel, CPCU, ARM explains how businesses in the oil & gas sector can mitigate financial risks by forming a captive insurance company. Lance highlights the biggest risks facing oil & gas businesses today—and how to recover from losses. See the interview >>
Megan M. Brooks, ARM and Vice President of Operations for Capstone Associated Services, Ltd. discusses how a good captive manager can help overcome bank over-regulation hassles and how captive insurance owners can benefit from established banking relationships. Continue reading.
Experts from Capstone Associated Services and The Feldman Law Firm LLP weigh in on the true function of captives. Controversies and misconceptions about the alternative risk management strategy are discussed in full detail.