To Captive Or Not To Captive? That Is the Question.
Should mid-market and small businesses own their own insurance company – specifically, a captive insurance company?
This question is aptly addressed in a recent article written by Attorneys Phil Karter, Scot Kirkpatrick and Christopher Steele of Chamberlain Hrdlicka in a recent issue of Captive Insurance Times. Their article provides an excellent framework for setting up and operating captives correctly.
We have often written that Congress wants business owners to own their own insurance company. Theses attorneys clearly agree. In their article, they point out:
Risk management is essential to the health of any business and Congress has encouraged it by incentivising businesses to form captive insurance companies. For micro businesses, Congress has created an additional incentive under section 831(b) of the tax code, which allows their associated captive insurers to exclude premium income from tax altogether, up to a specified annual dollar limit of $2.3 million in 2018.
According to Karter, Kirkpatrick and Steele:
[B]usiness owners who are committed to forming and operating them correctly should not be dissuaded.
This article is definitely worth reading.
Click the link below to download it.
Karter Kirkpatrick and Steele in Captive Insurance Times 04 05 18