One of the benefits of owning a captive insurance company is that it provides a remarkably efficient vehicle to fund a buy-out agreement among business owners.
Fall is upon us, and CIC Services is hard at work setting up captive insurance companies (CICs) for clients. This season has been brisk, and, based on applications in process, we expect to grow the number of captive insurance companies under management by 20 percent.
It takes approximately two months to fully form a captive insurance company. Many of our clients who have decided to improve their risk management by owning their own insurance company are pressing to have their CIC formed this year so that they can pay premiums to their CIC in 2013.
Insurance premiums paid to CICs in 2013 are tax deductible, and clients we are serving will reduce 2013 taxable income by $400,000 to $1.2 million.
The clock is ticking, but it’s still not too late to choose to own your own insurance company in 2013. The CIC Services Risk Management Team has established a preliminary deadline of November 1, 2013 for the establishment of CICs that will be operational and prepared to issue policies and collect premiums in 2013.