Is Captive Insurance Simple or Complex?
Captive insurance is both simple and complex. Understanding the key components — insurance, ownership, investment, and teamwork — reveals a powerful yet manageable solution.
The Answer Is Yes
Simply stated, captive insurance is insurance. So how is it complex? Understanding the moving parts — lines of coverage offered, different types of captives, ownership structure, parties involved, investment of captive assets, re-deployment of assets, and how all these variables work together — may be either simple or complex depending on your perspective.
Insurance
Simple: First, last, and always, captive insurance is insurance and part of a business's risk management program. Premiums are paid, claims are made when a loss occurs, and coverage is in place.
Complex: There are over 65 different exposures which can be underwritten. The unique nature of your business allows personalized selection of coverages most important to you.
Ownership
Simple: Ownership of your captive can be as simple as an LLC.
Complex: Your current and future structuring, goals, and relationships create multiple opportunities for how and where in your organizational chart your captive should be owned.
Investment
Simple: Your insurance company assets should be managed for desired return and risk tolerance. These funds are your insurance company assets and must be invested as such.
Complex: How, when, and where these assets are managed is critical, as compliance requirements are much more complex than typical investment accounts.
Re-deployment of Assets
Simple: Captive surplus may be distributed in the future at long-term capital gains rates.
Complex: There are advanced re-deployment opportunities in a variety of ways dependent on sequence, timing, and proper compliance.
Turn-Key Process
Simple: A turn-key process from education, implementation, maintenance, and eventual shut down is in place.
Complex: Time, pressure, priorities, and understanding can make the turn-key process seem more complex than it is.
Teamwork
It takes a well-oiled machine to create an insurance company. Each member of our team should be part of your team. These teams are coordinated together by experience, knowledge, and a collaborative mindset. Our team includes administrators, legal, investment, actuaries, underwriters, and most importantly, you the business owner.
A Powerful Solution
Captive insurance is simple and complex, personal as well as a very powerful solution. It is a solution to complete your risk management program, a solution to retain more of your hard-earned profits, and a solution to create long-term wealth.
Call 720-213-0583 to discover how simple it can be.