Captive Insurance FAQs

How do jurisdictions compare?
One choice jurisdiction is Anguilla. While Anguilla is a newer insurance domicile, first passing insurance legislation in 2004, is has a highly regarded statute and flexible regulatory structure. The capital requirements are as low as any requirements found either in the US or foreign countries. The approval time is fast. The government is pro-growth and the regulators are knowledgeable and reasonable.

Does the IRS really allow these tax savings?
Yes the code section have been in the law for over 50 years and were received and amended by the Congress in April 2004. The benefits are allowed under the “Safe Harbor” Revenue Rulings in 2002, and have been reaffirmed by additional rulings and letter in 2004 and 2005.

How do I know if my business qualifies?
Most closely-held companies with taxable income of $500,000 or more will qualify.

How much money can my business transfer to my captive?
The maximum contribution is $1.2million per year, but premium can be as little as $250,000 or less. The amount your business(es) pay to your captive will depend on the types of risks to be insured and the amount of premiums necessary to cover those risks. Premium amounts are determined by reference to actuarial “loss cost” data, and tailored to accommodate your company’s available cash flow and premium financing options.

Can I use funds inside the CIC?
Funds inside the CIC can be invested immediately in a variety of investment vehicles chosen by you. You control the assets, and make all investment decisions. Many clients choose mutual funds, bonds and real estate as typical investments. Over time, withdrawal for retirement can be made.