A series of high-profile victories in court for the IRS over 831(b) captives has tarnished the reputation of these structures, but they do not deserve their shady reputation, as Jeremy Colombik of Management Services International told Captive International.
There have been a number of high profile fights between states and captives in recent years, including Johnson & Johnson v New Jersey, Stewart’s Shops v New York and Microsoft v Washington. If these cases haven’t grabbed your attention you need to wake up, says Gary Osborne, vice president at Risk Partners.
RRGs are regulated by the state in which they domicile, and are free to do business in other states, but many non-domiciliary states are operating well outside the scope of the law, says Jon Harkavy of Risk Services.
Many regulators are still deeply sceptical about the growth of cryptocurrencies, and the impact they might have on markets, but they are potentially transformative in the insurance industry. They could spawn a whole new generation of investable insurance products, says Matthew Queen of Venture Captive.
A captive can bring a number of efficiencies to a global benefits programme in addition to the traditional advantages of reduction in external costs and retention of underwriting profits, as Alexandra Gedge at Marsh explains.
Captives are still domiciled in physical jurisdictions and regulated by real people, but for how much longer? In the future, regulation could be provided by sophisticated and fully autonomous websites, reducing costs and increasing efficiency, says Matthew Queen of Venture Captive Management.
Captives are complex vehicles designed to help businesses meet their strategic risk-financing objectives. To accomplish this they must continually respond to emerging and evolving risk and insurance needs, and maintain their alignment with changing corporate strategic and operational objectives, including group risk finance strategy, says Elizabeth Steinman of Aon.
Captive loan-backs are like pitbulls. Like that sturdy breed of dogs, they can look dangerous, and are too often misunderstood. But despite their sometimes murky reputation, loan-backs can be a highly effective way for the owner of a captive insurance company to self-finance, says Richard Magrann-Wells of Adjoint.
The financial benefits of premium reduction and tax reduction for owners of captives are well documented. But many of the less obvious benefits are underemphasised and not well celebrated, and certain types of captives offer much more than profit preservation for the owner, says Darren Lossia of Innovative Computer Systems and Direct Claim Solution.
It’s important to get the balance of equities, bonds, and cash right when allocating assets to a captive, says Jack Meskunas, executive director—investments and captive insurance asset management advisor at Oppenheimer & Co.