Finance, Investments, and Accounting
Risk distribution is a prerequisite for an insurance transaction to be deemed to have occurred and therefore achieve deductibility of premium for tax purposes. Captive owners seeking to determine whether their captive has sufficient risk distribution have a new methodology to consider in expected adverse development.
Given recent changes in investment markets, captive insurers should take another look at their asset allocation models. A recent Strategic Asset Alliance presentation presents five potential shortcomings in assets allocation models and five key questions to ask your investment manager concerning their asset allocation model.
Direct placement taxes apply to both surplus lines placements as well as placements with any nonadmitted company, such as a captive insurer.
What does 2018 have in store for captive insurer investments? We look at investment return assumptions and new accounting regulations. We also suggest some questions that should be raised by the captive board members concerning the investment portfolio.