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The Avrahami and Feedback Decision Observations

Bruce Wright
April 30, 2018

A new Captive Thought Leader Video featuring Bruce Wright, senior vice president and manager of the global and captive insurance group at Eversheds Sutherland (US), titled "Insights into the Avrahami and Feedback Decision," has recently been added to the library.

On August 21, 2017, the US Tax Court decided two companion cases, Avrahami v. Comm'r and Feedback Ins. Co., Ltd. v. Comm'r, 149 T.C. 7 (2017), involving various issues surrounding the formation and operation of a captive insurance company in Saint Kitts. Mr. Wright reviews the federal analysis by the Tax Court. In the Avrahami case, the Tax Court looked at 1) premium calculations and amounts, 2) risk distribution from number of insureds, 3) exposure units, 4) risk distribution from terrorism pool, and 4) applicable coverages.

Mr. Wright also discusses what can be learned from the Avrahami case. In particular, a captive should do things that are normally done by insurers such as 1) follow regulatory rules, 2) submit losses on a regular basis, 3) write policies with detailed terms and conditions, 4) allocate policy premiums, and 5) develop an actuarially derived premium calculation based on general actuarial principals.

This section of the site currently features 88 short educational videos by 14 captive insurance experts. Among the topics covered in the 1–3-minute videos are micro-captives, tax issues, captive feasibility, captive domicile selection, choosing an auditor, captive management, group captives, healthcare captives, risk pooling, common myths about captives, how to manage a captive efficiently, what makes a captive successful, and benefits in captives.

Along with Mr. Wright, the captive insurance experts featured in the videos include the following.

  • John Alberici, chairman, Alberici Corporation

  • Gary Bowers, tax partner, Johnson Lambert

  • Jeremy Colombik, president, Management Services International

  • Martin Ellis, manager of Comerica Bank's global and captive insurance group

  • Martin Eveleigh, chairman, Atlas Insurance Management

  • Alan Fleming, chairman, Airmic

  • Debbie Liebeskind, actuary and human resources, Willis Towers Watson

  • Michael Maglaras, principal, Michael Maglaras & Company

  • Steven Mcelhiney, president and CEO, EWI Re, Inc.

  • Michael O'Neill, president and CEO, American Contractors Insurance Group

  • Hugh Rosenbaum, retired principal, Willis Towers Watson

  • Lynn Sheils, general counsel, EWI Re, Inc.

  • Brady Young, president and CEO, Strategic Risk Solutions

Each of these captive insurance thought leaders has decades of broad experience with captive insurance companies and freely share their expertise in the videos. This constitutes a wealth of information on captive insurance fundamentals that will be especially valuable to newcomers to captive insurance. By watching one or two of these informative videos each day for a month, you will hone your knowledge of captive insurance fundamentals and trends.

There is no cost to view the videos, and you will find them in the Captive Thought Leader Videos section of More videos will be added in the future.

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