Contact UsIs it a good idea to set up a captive insurance company for a growing business? What are the benefits? What is the downside of setting up this type of company?
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Fred Rollo
Captive insurance strategies have been widely used by large international corporations for many years. Over the past decade or so they have also become relatively popular for high net worth families with business interests. Such families will often use such entities as part of a "family office" structure.
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537 weeks ago
Of course, to be a valid "insurer", there must be "risk" to insure and an adequate "pool" of investments that can be drawn on for any "claims". Where there is large risk, reinsurance strategies may need to be considered.
More recently, smaller closely held businesses have been actively looking at the possible benefits of utilising captive insurance strategies.There was a very good summary by Robert Bertucelli CPA published in the March 2013 issue of the Journal of Accountancy. This will give you a broad-brush answer - www.journalofaccountancy.com/Issues/2013/Mar/20126102.htm
If you need clarification, message me in my Tax Boardroom on this site.