Finance, Investments, and Accounting
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. Learn 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. Learn More
Captive Insurance and Direct Placement Taxes Explained
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 for Captives
Pro forma financials provide an assessment of the expected financial results for the proposed captive insurance company. Read More
Custody for Captive Insurers
Martin Ellis of Comerica's Captive Insurance Group says custody for captive insurers is the safekeeping of a captive's financial assets in an account. Read More
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. Read More
Insurance-Linked Securities and Collateral: An Essential Overview
Insurance-linked securities (ILS) let insurers transfer risk to investors, boosting reinsurance capacity and offering diverse, higher-return investments. Read More