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MSI Releases New Podcast, "Captive for Dummies: Syzygy… What Went Wrong?"

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July 11, 2019

Raleigh-based Management Services International (MSI) has released its latest podcast episode, which is titled "Captive for Dummies: Syzygy… What Went Wrong?" and is immediately available free of charge from the MSI podcast library. The MSI podcasts are geared toward advisers, certified public accountants (CPAs), captive owners, and potential captive owners seeking knowledge on captive insurance and nonqualified deferred compensation programs.

This episode discusses "what went wrong" in the Syzygy Ins. Co. v. Commissioner captive insurance company tax court case where the court ruled that Syzygy was not operating as an insurance company and as such, should not receive insurance company benefits. The following key points from the case are discussed in the episode.

  • There were no actuarial premiums set to price the policies and no calculations showing how the policy premiums were determined.
  • The captive insurance company did not have a claims procedure, nor did it undertake claims investigation.
  • The captive insurance company had more than 50 percent of its assets in a vehicle that it could not access to pay claims.
  • The captive insurance policies were not issued on a timely basis.
  • There were no "holdbacks" from the fronting insurers for claims.

MSI said it wants to make it as easy as possible for captive owners, advisers, CPAs, and industry peers to access MSI's captive insurance solutions message and share it with others. Likewise, MSI wants anyone who is curious about maximizing and strategizing risk management solutions with a captive insurer to have a quick and easy way to inform themselves.

Hosting each podcast is MSI Founder and President Jeremy Colombik, CPA, who will be speaking with a lineup of industry experts and captive owners over the course of the next year.

Mr. Colombik said, "The show has a pretty exciting schedule with new episodes launching every month for now and perhaps transitioning into every other week once everything begins humming. Our final goal is to release the episodes more often so that we can discuss as much as possible with our listeners."

He continued, "The podcast has been submitted to iTunes, Spotify, and other podcast streaming services."

Podcast #6 (July 2019)

The Lineup

Upcoming podcast episodes include the following topics.

  • What Type of Coverage Should Be Written in a Captive? This installment will review how captive coverages are determined and what coverages every business across all industries should consider having in a captive.
  • Is Captive Insurance a Solution for Cyber-Security Risk Management? This installment will explain how a captive insurance company can work to help protect businesses against cyber attacks. Cyber is the firm's most sought-after coverage.
  • Captive Insurance—Making Risk Management More Profitable. MSI believes that what makes risk management profitable comes down to understanding that whether a business purchases insurance or not, the risk is still there. This installment will explore how moving risks into a captive insurer can help a business increase its profitability, achieve better coverage, and increase risk awareness.
  • Why We Choose North Carolina for Captives. This installment will go over the benefits of the North Carolina captive domicile and discuss reasons why MSI supports captive formation in North Carolina, from North Carolina's low regulatory formation and operational costs to its reasonable and appropriate regulatory approach along with its dedicated captive insurance regulatory team.

Previously released podcast episodes include the following.

  • February 2019: MSI's first podcast episode, titled "Captive Insurance for Dummies," explains captive insurance and why business owners who gross $1 million or more annually should consider owning their own insurance company.
  • April 2019: "Captive Claims Processing for Dummies," reviews how a claim is processed, including allocating the proper proportion of the claim to the captive. The episode also discusses the most frequent claim types that MSI sees in the captives it manages, explains how these claims are processed, and provides examples of types of claims that are approved for coverage in a captive and why some claims are not covered or denied coverage.
  • May 2019: "Captive Facts vs. Myths for Dummies" clears up the difference between captive myths and facts including: all captive insurance companies are not bad just because they appear on the IRS' dirty dozen list; captives are not just for Fortune 500 or Fortune 1000 companies; most captive insurers are currently not domiciled outside of the United States; it is not true that captive insurance companies are an unfeasible option for business owners with less than $500,000 in budgeted insurance premiums and less than $7.5 million of gross revenue; and all captives are not tax shelters—while captives have tax advantages, a tax shelter is set up specifically to avoid and evade taxes.
  • June 2019: "Captive for Dummies, Q & A from Brokers, CPAs, and Clients" answers the following questions from brokers, CPAs, and clients: Will I lose money with a captive insurance company and are captives safe?, What is a captive insurance company's money invested in?, How much are captive insurance company fees?, What happens if I sell my business and no longer need my captive insurance company?, and What if I pass away before I exit my captive insurance company?

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