Finance, Investments, and Accounting
How Do Captive Insurers Use Reinsurance?
Captive insurers utilize reinsurance to mitigate risks, stabilize earnings, and comply with regulatory requirements. They may operate as direct insurers or as reinsurers through fronting companies, which allows them to access broader services and potentially achieve tax benefits, while maintaining compliance across various jurisdictions. Learn More
Direct Procurement Taxes and Captive Insurance Compliance
Bruce Wright, partner at Eversheds Sutherland (US) LLP discusses direct procurement taxes in terms of captive insurer compliance. Learn More
Why Cash Flow Matters for Captive Insurers
A captive insurer can report strong financial results yet lack cash when claims come due. This article explains how premium collections, investment liquidity, reinsurance reimbursements, and claim payments affect cash flow. It also outlines questions board members can ask to identify potential shortfalls and assess the captive's ability to pay claims. Read More
Why Is Tax-Deductibility of Captive Premiums Important
Tax-deductibility of premiums is a key issue for captive insurance companies, and in this video P. Bruce Wright of Eversheds Sutherland (US) LLP discusses how timing is the key factor in this equation. Read More
Writing Third-Party Business in a Captive
The biggest advantage to writing third-party business through a captive insurance company is that it may provide a tax advantage. Read More
What Is FATCA and How Do Captives Handle It?
This article explains how the Foreign Account Tax Compliance Act (FATCA) applies to captive insurance companies. It outlines reporting and documentation requirements for US and foreign captives, discusses withholding agent responsibilities, and explains key distinctions between foreign financial institutions and nonfinancial foreign entities under the FATCA rules. Read More
When Are Premiums Paid to a Captive Insurance Company Deductible for Federal Income Tax Purposes?
Premiums paid to a captive insurance company are deductible for federal income tax purposes only if the arrangement qualifies as true insurance. This requires risk transfer, risk distribution, and alignment with common insurance principles, as recognized by the Internal Revenue Service and courts. The structure and underlying risk profile ultimately determine deductibility. Read More