Finance, Investments, and Accounting

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

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

Direct placement taxes apply to both surplus lines placements as well as placements with any nonadmitted company, such as a captive insurer. Read More

Pro forma financials provide an assessment of the expected financial results for the proposed captive insurance company. Read More

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. Read More