Columbia Captive Insurance
Since 2005, CIC Services, LLC has helped businesses, business owners and professionals in Columbia, MO form a Captive Insurance Company (or additional CIC if the business already owns one) to formally insure risks that the business is currently informally self-insuring. This insurance company can be owned by the business, its owner or owners, the owner’s children or other related parties. This game changing financial vehicle will afford the following benefits:
- Improve Overall Risk Management Strategy
- Keep More Of Your Hard Earned Money
- Amass Significant Wealth
- Protect Assets
- Enjoy Favorable Tax Treatment
- Potentially Pass Wealth To Heirs
The overall (or aggregate) wealth of one or more companies with a captive insurance company is almost always higher – significantly higher – than the overall wealth of companies without a captive insurance company. This occurs for two primary reasons. First, the parent company takes an expense as it pays its insurance premium to its captive. This lowers the parent companies taxable income. And, the captive does not pay taxes on the premium it collects (up to $1.2 million annually). Second, the captive is able to earn a return on its reserve pool (or assets). And, the captive’s asset pool has been amassed with pre-tax dollars, enabling asset growth on a larger starting base.
Hence, the captive effectively acts as a legal tax shelter for the premiums received from its insured.
Premiums are paid from the parent company to the captive with pre-tax dollars, and accumulate tax-free as reserves of the captive (up to $1.2 million annually). Captive reserves can be translated into virtually any other type of asset (some domiciles have restrictions). Hence premiums paid to the captive are in effect a “transfer of wealth” and are protected from the parent company’s creditors and lawsuits. For this reason (tax savings and reserve accumulation), a captive insurance company is quite often a successful and profitable “second business.” Over time, a well-structured captive can often double a business owner’s wealth.
Please contact us by phone or e-mail to discuss if captive ownership is the right move for your business.