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National Tax Conference 2017


NTA17202 - Facts & Operational Issues in the Management & Administration of Captive Insurers


Nov 6, 2017 7:00am ‐ Nov 6, 2017 7:50am

Standard: $49.00

Description

Recently, captive insurance has been a popular topic for discussion, particularly with respect to the IRS scrutiny and tax issues surrounding captives. However, not enough focus has been on the actual operations of captive insurers. Just because a captive insurance arrangement, on its face, appears to satisfy requirements of federal tax law, that does not necessitate that the actual operations of the captive insurer are in compliance with insurance regulations and industry best practices. In fact, most captives fail because of the lack of diligence in captive planning and attention to their operations. Attendees will hear practical information on what to look for in evaluating the operations of their clients’ captive insurers. Issues to be addressed include:

  • the design of coverages
  • the choice of insureds
  • recommended pricing procedures for captive policies
  • the ownership of the captive
  • the nature of the risks insured
  • the need for a diversified portfolio of risks
  • recommended claims handling procedures and administration
  • the appropriateness of feasibility studies and what they should contain

The formation and operations of the captive will be discussed. The appropriate role of the so-called “captive manager” will be discussed as well as the potential dangers of relying on unsophisticated managers for this critical administrative position. The many moving parts in the design, formation, and operations of a captive insurer and the appropriate qualifications for each role will be explained.

  • Attendees will learn why strategic decision-making matters to the success or failure of captive insurance companies.
  • Attendees will learn about several strategic decisions which directly impact a captive’s operations.
  • Attendees will gain a keen awareness of the drawbacks of an à la carte approach to captive planning, such as a loss of oversight.

Speaker(s):

  • Stewart A. Feldman, J.D., CEO and General Council, Capstone Associated Services, LTD.
  • Coby Hyman, JD, LL.M. (Taxation), Tax Counsel, Capstone Associated Services, LTD.
Tags: Early Riser

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