Insurance Agents & Captive Insurance Planning

Bringing Captive Insurance to Clients

As an insurance agent, talking to your clients about forming their own captive insurance company will solidify your business relationships, promote client retention and encourage referrals.

By definition, a “captive” is an insurance company that has been specifically formed to insure the risks of an affiliated business. Captives are fast-becoming one of the most sought-after risk funding strategies for the mid-market.

As you’re aware, commercial insurance often carries exclusions, or “gaps” in coverage--Captives fill these insurance gaps with custom-designed coverages, providing a comprehensive solution. In short, captive insurance companies supplement the commercial policies. When losses occur, nothing falls through the cracks.

In addition to the insurance benefits of captives, financial benefits, such as a 0% Federal income tax on the captive’s underwriting profits, may also be available.

How Insurance Agents Provide Value Through Captive Planning

Risk coverages that are expensive or unavailable in the commercial marketplace can be underwritten through a captive arrangement. These broader coverages are custom-built for the client’s specific business risks. When structured right, in compliance with regulatory and IRS requirements, a captive insurance company is a powerful risk management solution.

As an insurance agent, you’ll bring unparalleled value to your midmarket clients by starting the captive discussion. By discussing uninsured risks with clients, and the ways in which captive coverages can address them, you’ll showcase your broad expertise and a genuine investment in fully developing your client’s risk management strategy. Ultimately, your unique value relies on bringing new, and cost-effective strategies to the table. This is your chance to make a true impact.

In addition to the risk coverage benefits, the potential asset protection benefits combined with Federal tax incentives promote ongoing financial efficiency. Business owners will be able to use their captive’s underwriting profits as investment income and can potentially use commercially reasonable loans from the captive to the operating company to purchase needed equipment, pay for repairs, buy real estate, and more. It is value, over and above, a conventional insurance product.

Partnering with Capstone

Advisors, including insurance agents, are invited to work collaboratively with Capstone Associated Services, Ltd. to offer captive insurance planning to their clients. Capstone’s in-house team of insurance, tax, and legal professionals will consult with you, providing insight into the captive formation and management process.

Our team will support your clients throughout the life of the captive.

The ideal captive insurance client is a business owner or group of owners with a substantial operating business that has meaningful uninsured or underinsured risks. Ideally, the operating business would need to have a minimum of $1.5 million in pre-tax profits before partner distributions, bonuses, and other forms of compensation.

Quick Facts:

  • As a trusted advisor for captive planning, you’ll remain a key point of contact for your clients.
  • You’ll have a team of captive insurance professionals on your side that will help with the formation and management of captives for your clients.
  • After you speak with your clients, Capstone and key agency staff will present the concept to them and ultimately conduct a feasibility study to determine what uninsured risks exist within the business.
  • Ultimately, we’ll work together to help determine whether a captive insurance company is right for your clients.
  • We’ll always keep you up-to-date on all new captive insurance-related  developments.


Partner with Capstone. Contact us today for information.

About Capstone

Capstone Associated Services, Ltd. is the most integrated and comprehensive outsourced provider of captive insurance services for the middle market. We are among the largest in the industry offering stand-alone, single parent captives. Capstone administers property & casualty insurance companies that provide alternative risk financing services throughout the U.S. Now in its 26th year, Capstone provides turnkey services to manufacturers, distributors, service providers, and professional organizations.

Capstone's own staff of professionals includes Chartered Property & Casualty Underwriters, insurance experts, claims managers, underwriters, accountants and administrators. Capstone’s expertise is bolstered by outside CPAs, risk managers, property & casualty professionals, and actuaries. Together, this team offers middle market companies the most comprehensive risk planning solution available. Today, captives are the premier risk management and risk-financing tool for qualified middle market companies

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