Capturing the benefits of captive insurance

Description

Abstract: A captive insurance company is a private insurer owned and controlled by the business or businesses (or the owners of such entities) it insures. For years, large corporations have used captive insurance companies to control insurance costs. Today, even small, closely held businesses are taking advantage of the many financial, tax and estate planning benefits captives have to offer. This article takes a look at these benefits, but a sidebar notes that, to achieve them, a captive must qualify as an “insurance arrangement,” which involves elements of risk shifting and risk distribution.