Unique and Simple way to own a Captive
Simplify captive insurance conundrums with MSI captive solutions. Our proprietary captive structure enables businesses grossing as little as $1,000,000 or more per year to qualify for the unique benefits of owning an insurance company. Ownership benefits include creating insurance coverage for a business’s unique risks that are not available in the commercial insurance or excess and surplus lines insurance markets. Additional benefits are creating a profit center, better management of risk, the ability to cover exclusions in commercial policies and increased risk awareness. MSI’s team of expert captive professionals combines decades of captive management experience who work together on behalf of the captive owner client. MSI clients sleep well at night knowing their captives are compliant and well managed.
These are suggested steps in captive formation:
Step 1: Retain a Captive Manager after careful due diligence
Step 2: Risk assessment via Feasibility Study
Step 3: Captive Structure selection which best meets a business’s needs.
Step 4: Select Domicile
Step 5: Prepare and submit Captive Application to domicile
Most businesses interested in Captives have better than average losses, which means the 3rd party insurance company made a significant profit on those policies.
Our expert captive management team has decades of combined captive experience. Thus, our captive owners confidently enjoy lower risk, creating a profit center and potential tax benefits.
MSI Captives Frequently Asked Questions
Small captives also known as 831b or micro captives can receive up to $2.3 million of annual premium without paying taxes on the receipt of premium. 831a captives with premiums over 2.3 million also enjoy some of the tax efficiency of 831b’s.
Prudent captive managers correlate a company’s gross revenue with an acceptable percentage of insurance costs for that industry. For example: just because the 831b election allows 2.3 million of premium to be received and deducted from the taxes of the operating company paying the premium to the captive, it does not mean a $4 million annual revenue company could deduct 2.3 million in insurance premiums. Skilled, experienced captive managers keep clients inside reasonable IRS guidelines.
In order to gain the true meaning of search results, in depth reading is necessary. Unfortunately, the bad apple captives who are few and far between, are getting more attention than the thousands of other captives who are formed for the right business purposes.
There are 7,000 or more captives and only 500 fortune 500 companies, thus vast majority of captives are created to manage risk of small to midsized companies. Captive Structures vary depending on the type of business and size. Management of a captive formed for a $5 million company would use a different structure than a $5 Billion dollar company.
Unfortunately, a lot of captive managers outsource most services to third party providers in order to run the captive properly. This means that a captive owners’ costs will be higher. MSI has its own back-office support for captives so many of those outside providers would not be needed and thus the captive owner saves money as well as being more efficient.
Let Us Help You!
For over a decade, MSICaptives.com and Management Services International (MSI) have provided alternative risk solutions, as well as formation and management services to wide range of companies in various industries. We certainly understand that you face a lot of risk as a business owner or risk management professional and that there are exposures and risks that can’t be covered with traditional insurance.