Following a risk management analyses, MPR-Fintra may recommend superior captive design, utilization and management on behalf of its clients. We believe that financially strong, well risk-managed insurance clients should participate in their own risk financing, through captive insurance companies or alternative mechanisms and reap the benefits of their own insurance premium profits.
There are various types of “captive” insurance formations. These formations can take place in the United States or a number of “off shore” domiciles. The off shore domiciles provide substantial tax advantages if the captive ownership and a mix of risk is structured correctly. Captive ownership may be structured in any number of ways including various forms of corporations and even a mutual company with policy holder ownership.
Bermuda is often said to be the largest off shore domicile with over $70 billion in captive insurance company assets. It is a preferred domicile, because it is well regulated, with consistent laws, and there is no tax on insurance company profits. There are a number of other Caribbean, European and Asian domiciles as well. The State of Vermont has been the most preferred domicile in the United States, but many other states have attractive captive insurance laws as well.
Various captive type structures apply to both single parent, group and association captives. They include:
- Pure Captive
- Segregated Cell Rent-a-Captive, and
- Risk Retention Group as a national U.S. variation