August 05, 2014

Your question is both a simple and complex one, assuming I understood it correctly.

Most insurance companies, including captives, are C-corps. Whether other types of legal entities are permissible is somewhat domicile dependent. Some domiciles specify the type of legal entities available within their insurance/captive laws, while others refer to their corporate laws.

Beside C-corps, the other most common forms of corporate entities used are LLC's and reciprocals. Some domiciles also allow entities under their nonprofit laws.

So, regarding your specific question as to whether a S-Corp structure is available, the answer would depend on the domicile selected ( I have never been involved with a captive that was formed as a S-corp).

I should, however, specify that if your question is driven by a tax consideration, I strongly suggest that you review with a CPA or a tax attorney as the corporate form does not necessarily equal a specific tax treatment with an insurance company. The transaction itself may drive the tax treatment. For example, an insurance company formed as an LLC may be required to file a tax return as if the entity was a C-corp if the insurance transaction is deemed to be an insurance transaction for tax purposes (it would not be disregarded even if formed as a single member LLC, a structure that would otherwise be disregarded for a standard entity).

I hope this is helpful.