Sometimes a headline comes along which casts much needed perspective on a situation. The situation I have in mind is the auditing of captive insurance companies by the Internal Revenue Service (IRS). And this brings up a question: Should small and mid-market business owners miss the opportunity to own their own insurance company for fear of being audited?
A better question would be:
Business owners, CFOs and Risk Managers take notice! COURANT recently reported that a top state regulator warned that, “Connecticut’s utilities are likely to be targets of cyberattacks by computer hackers and the state needs to ‘wake up,
Last week, I wrote that America needs at least 100,000 captive insurance companies. Small and mid-size businesses that own their own insurance companies are better prepared for risk and uncertainty. The loss reserves they can potentially accumulate in their captive insurance company can easily be the difference between thriving, surviving or dying.
And speaking of loss reserves, the U.S. Treasury recently issued a report
This spring we reported that the magic number for captive insurance companies worldwide was 6,408 according to CAPTIVE REVIEW. Industry growth was 4% with approximately 250 captives being added in 2015. If cells are counted, the total number of risk bearing entities is approximately 10,000.
This raises a few questions.