A company usually forms a Delaware captive insurance company to protect its financial interests and those of associated companies. These "captive companies" (so named because they are controlled by the policyholder and owner) generally provide more tax benefits for the parent company, thanks to recent U.S. taxation code provisions provided by Congress, which can include claim a deductions for premiums accrued by the insurance company. Establishing and maintaining a captive company can be somewhat complicated and time consuming, which is why most parent companies hire a financial management advisor to help them. These captive managers, provide a variety of services that are necessary to evaluate, form, and manage a captive for their client companies.
Evaluating a captive involves analyzing it to see how it could be formed to best meet the needs of the client company. This would include a wide assortment of activities, such as drawing up financial projections, determining fund allocation, summarizing insurance coverage, drawing up an outline of how to form and manage the captive, identifying and analyzing potential risk factors, and determining potential solutions.
Establishing the insurance company might include taking care of financial fronting, reinsurance opportunities, regulatory, accounting, and tax matters and other associated issues. Since licensing also falls under this category, they would also take care of any regular communication required to get approval for licenses, prepare applications and documents required by insurance regulators, contracting service providers, supervising captive incorporating, filing applications, paying licensing fees, or any other related information .
Managing a Delaware captive would include handling accounting, taxes, underwriting policies, regulatory compliance, and these types of services. Since this is the bulk of the long term and total workload, it saves the client company countless hours of work and stress.
Handling accounting means explaining what filing under a section 831b captive insurance tax break would mean for a company, preparing balance sheets, and drawing up a separate business plan with detailed financial statements. Tax details also fall under this category, meaning they will care for preparing NAIC (National Association Of Insurance Commissioners) filings, tax returns, extensions, customized management reports, any arrangements for hiring professionals, and arranging yearly external audits. Any policy underwriting and policy issuance would also be done by them when needed. That means they also prepare premium payment bills, insurance binders and packages, policy forms, confirmation of coverage letters, declaration pages, applications, coordinate with a ratings professional, underwrite any insurance risks when necessary, and determine premium levels and coverage options. They manage regulatory compliance (meaning they make sure the captive insurance company follows government finance rules and regulations) by doing quarterly finance reviews, monitoring back statements and brokerage information, performing annual reviews to check corporate legal requirements, solvency, and other related activities.
Evaluating a captive involves analyzing it to see how it could be formed to best meet the needs of the client company. This would include a wide assortment of activities, such as drawing up financial projections, determining fund allocation, summarizing insurance coverage, drawing up an outline of how to form and manage the captive, identifying and analyzing potential risk factors, and determining potential solutions.
Establishing the insurance company might include taking care of financial fronting, reinsurance opportunities, regulatory, accounting, and tax matters and other associated issues. Since licensing also falls under this category, they would also take care of any regular communication required to get approval for licenses, prepare applications and documents required by insurance regulators, contracting service providers, supervising captive incorporating, filing applications, paying licensing fees, or any other related information .
Managing a Delaware captive would include handling accounting, taxes, underwriting policies, regulatory compliance, and these types of services. Since this is the bulk of the long term and total workload, it saves the client company countless hours of work and stress.
Handling accounting means explaining what filing under a section 831b captive insurance tax break would mean for a company, preparing balance sheets, and drawing up a separate business plan with detailed financial statements. Tax details also fall under this category, meaning they will care for preparing NAIC (National Association Of Insurance Commissioners) filings, tax returns, extensions, customized management reports, any arrangements for hiring professionals, and arranging yearly external audits. Any policy underwriting and policy issuance would also be done by them when needed. That means they also prepare premium payment bills, insurance binders and packages, policy forms, confirmation of coverage letters, declaration pages, applications, coordinate with a ratings professional, underwrite any insurance risks when necessary, and determine premium levels and coverage options. They manage regulatory compliance (meaning they make sure the captive insurance company follows government finance rules and regulations) by doing quarterly finance reviews, monitoring back statements and brokerage information, performing annual reviews to check corporate legal requirements, solvency, and other related activities.
