Your business has insurance needs. Unfortunately, all too often, those insurance needs either cannot be met through traditional insurance channels, or purchasing insurance on the “regular” market is cost-prohibitive. That’s where creating – and using – a captive insurance program can help.
Using a captive insurance investment management program can do more than just meet your company’s risk needs. It can also create a profit center for your company, give your company increased control over its insurance programs, and provide attractive tax planning opportunities for the business.
When you establish a captive insurance program, you are self-funding your organization’s insurance needs. What you would have paid out to another company in policy premiums can instead be invested and used to pay losses. Those invested funds can grow, and you can control the distribution of funds until losses are paid out.
By their nature, captive insurance programs also provide a greater level of control over and insight into insurance program operations. Claims administration, and loss control can help businesses with captive insurance programs make strategic decisions that could affect the program’s, and the company’s, long-term profitability,
Potential Tax Advantages of Using a Captive Insurance Investment Management Program
While you should talk to your own tax professional about how a captive insurance program might impact your business’ taxes specifically, there are several potential tax advantages that come with operating a captive insurance program.
- The parent company may be able to deduct the insurance premium paid to the captive insurance company
- The program provides an opportunity for tax-favored wealth accumulation
- Distributions to owners of the captive insurance company may receive favorable tax rates
- Assets of the captive insurance program are protected from the business’ and its owners’ personal creditors
Finally, the control a captive insurance program gives you over your insurance program allows you to invest the funds you would have otherwise paid to an insurance company for premiums, and reinvest the profits.
When you choose to work with Venture Captive Management, LLC, we can help you identify which investment plans meet the insurance company statutes’ requirements in your state(s). We can also help you manage cash flow and provide assistance with investment accounting.
We have established relationships with qualified investment managers who truly understand the nuances of captive insurance investment management programs. Working in partnership with the Venture Captive team, they will help ensure investments meet your risk profile, liquidity needs, and will provide strategic planning and periodic reporting to help keep your plan on track.
Choose Venture Captive Management, LLC
Of course, it is important to be aware of (and remember) that captive insurance companies must be established and managed to meet legitimate insurance needs. However, the profit and investment opportunities, potential tax benefits and increased control over insurance needs are all compelling considerations.
If you are considering establishing a captive insurance management program or simply want to learn more about the potential benefits and considerations, contact us in Norcross, GA today online, or by calling (770) 246-8535.