Companies are the legal entity having it own assets and risks. Hence, the captive insurance company is established to meet the risk management needs of its members. It covers all the risks. Captive insurance company operates like as a commercial insurance company.
Types of Captive Insurance Company
There are various types of the captive insurance company as prescribed below.
Single Parent Company: Single parent company is that which insure the risks of the only its parent company. It is also called as the pure captive insurance company.
Another kind of captive insurance company is an association or a group company, agency captive insurance company, risk retention groups, branch captives, producer owned Reinsurance Company, senior or diversified captive insurance company and much more.
Benefits from the Captive Insurance Company
This captive insurance company provides significant benefits as it’s a risk management strategy for the company. It is benefited from many taxes and non-tax benefits as prescribed below:
- Insuring risk
- Give access to the lower-cost reinsurance market
- Asset protection from the claims of the personal creditors
- Accumulation of wealth as a tax-favored tool
- Tax saving benefits as such estate tax saving, income tax saving for parent as well as captive insurance company
- Tax deduction of the insurance premium to parent company which is paid to the captive
More Tags:
- Captive insurance company tax benefits/ investment restrictions
- Captive insurance company tax shelter/ example/ definition