Many companies have established Captive insurance subsidiaries to manage and reduce the cost of insurance. Current IRS regulations require that a Captive maintain a significant amount of unrelated third party premium to realize maximum tax advantage. ABC has extensive experience assisting clients’ expansion of the Captive’s risk portfolios with personal lines coverage to maximize unrelated third party insurance within the Captive, thereby maximizing the financial advantages of the Captive itself while at the same time delivering valuable benefit services to the Captive insureds.
ABC’s core, differentiating expertise lies with Captive Reinsurance and the set-up and ongoing operation of reinsurance arrangements covering premium from employee benefit plans. With our deep expertise in Voluntary Benefit program design and implementation as well as Group Insurance in general, we are in a unique position to help Fortune 500 clients design and implement benefit plans within the context of their existing Captive structure for maximum financial benefit to the Captive, the Parent company, and the insureds within the Captive.
ABC also possesses significant experience in bridging the gap between HR and Risk Management to optimize the insurance needs of the parent organization via the Captive. A typical engagement starts with a detailed financial analysis of the Captive and Parent financial and risk structure to determine whether or not expansion of the insurance offerings into personal lines coverage makes sense. Where a financial opportunity exists, ABC then works with the Captive and client’s HR and Risk Management organizations to:
Address any Department of Labor and IRS filing requirements.
Support a cost / benefit analysis through reinsurance design and cash flow projections
Develop and negotiate financial arrangements between the carrier and the Captive
Create and finalize the formal reinsurance agreements with the carriers
Design and implement benefit programs through the Captive
Review and evaluate the ongoing financial arrangement optimization of the program and its financial and risk structure as necessary