Why Do Captives Get Credit Ratings?
While the need for ratings by traditional insurers is obvious, it is not so apparent for captives. This article explains why some captive insurance companies go through the credit rating process. Read More
Basics of Loss Development Triangles
As a member of the board of a captive insurance company, you have a responsibility to understand the key concepts that underpin how the captive performs. This second in a series of articles continues this educational process, focusing on the concept of loss development. Read More
The Basics of the 831(b) Election for Captives
Section 831(b) of the Internal Revenue Code may be elected by qualifying captives to exempt the captive insurer's underwriting profits from federal income tax. This article discusses the prerequisites that must be met as well as the transactions of interest reporting requirements. Read More
Taxation of Single-Parent Captives: A Basic Guide
One common captive structure is an insurance company owned by a single US corporation (a "single-parent captive"), which insures the risks of its parent and/or brother/sister companies. In some cases, single-parent captives cover risks of third parties as well as related party risk. The US federal income tax treatment of a single-parent captive and its owner depends in part on whose risk the captive insures and on whether the captive is a US company or a non-US company. This article summarizes the basic tax rules applicable to single-parent captives and their owners in various situations. Read More