Domestic Captive Insurance
Create of an insurance company that can be owned by an individual...
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Exploring the creation of an insurance company that can be owned by an individual or corporation can create value from a business risk, tax, and economic perspective. Utilizing a structure with integrity, identifying business risks, selecting a favorable jurisdiction and identifying the right team are all paramount.
Plan Mechanics
1 Based on IRC 831(b), premium income up to $2.35 million is not taxable to the domestic captive insurance company.
2 May have multiple captives if business risks and premiums are justifiable, and the captives are not owned by the same control group.
3 Total captive assets are subject to 3rd party claims in a policy year where one is participating in the risk pool.
4 A wholly owned holding company can be utilized to own the captive. Note: captive would still be part of the operating company’s balance sheet.