Tax Benefits of Captive Insurance Companies for Small and Mid-Size businesses


CLE Credits earned: 2 GENERAL (or 2 LAW & LEGAL for WA state)

What is captive insurance and why is it useful to your clients? Captives provide an unusual opportunity for clients to better manage risk than traditional insurance policies, and have unusually good tax benefits, when properly structured. While over 90% of the FORTUNE 1000 has used captives for generations, their use by smaller companies have only recently come into vogue. Captives,” as they are referred to, allow businesses the multiple advantages of retaining underwriting profits, fine-tuning enterprise risk-management, and often providing for better tax efficiency. This CLE discusses the emergence of captives for small to mid-sized businesses and emerging regulatory pitfalls associated with the use of captive insurance companies. Captives are not without their risks, and poorly structured captives may increase risk for participants, as explained in this program.

These issues have a significant impact on the entire captive insurance company life cycle from formation to administration and ultimately liquidation. This program is useful to all legal and accounting professionals who seek a better understanding of the U.S. regulatory issues involved with captive insurance companies, and want to understand whether a captive is an effective option for a client goals. Upon completion of the program, attendees will be able to spot good (and bad) candidates for a captive
program, and be able to intelligently guide these clients through the feasibility stage of a captive insurance program.

Key topics to be discussed:

•   What is Insurance and Why would I want to create a Captive Insurance Company?
•   Trends and Benefits of a Captive Insurance Company
•   How to Identify Clients Who Are Good Candidates for a Captive Insurance Company
•   Which Jurisdiction Should be Used?
•   Asset Protection Issues
•   Insurance Requirements
•   Trends in the Law and Case Studies—Avrahami and Beyond
•   IRS Pitfalls to Avoid
•   Establishing a Captive Insurance Company
•   Administration of a Captive Insurance Company
•   Particular issues that arise

Date / Time: June 5, 2019

•   2:00 pm – 4:00 pm Eastern
•   1:00 pm – 3:00 pm Central
•   12:00 pm – 2:00 pm Mountain
•   11:00 am – 1:00 pm Pacific

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•   Live Video Broadcast/Re-Broadcast: Watch Program “live” in real-time, must sign-in and watch program on date and time set above. May ask questions during presentation via chat box. Qualifies for “live” CLE credit.
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Original Broadcast Date: May 1, 2019

Jeffrey Katz, Esq. is the founder and managing partner of JDKatz, P.C. He received his undergraduate degree from The American University (Washington, DC), Law degree from the Chicago-Kent College of Law, and Masters of Taxation (LLM) from the University of Miami.

Prior to opening his own practice, Jeffrey began his career with the accounting firm KPMG/Peat Marwick, LLP providing Corporate, M&A, and Asset Protection advice to star-studded Fortune 500 clientele, inclusive of MCI/Worldcom, Sodexho/Marriott, and Hechinger Co.

Jeffrey entered his own legal practice in 2000, and has provided high-value representation in to corporate and individual clients alike, whether based nearby or from all corners of the globe.

Jeffrey also represents “C” level executives, and their families in their personal and estate planning matters.

Jeffrey’s tax, insurance and estate planning practice focuses on comprehensive planning which is both cost effective and impactful. He takes a special interest in charitable planning, and plans which allow grantors to impart their values to their beneficiaries. Jeffrey frequently serves as a Trustee, and has administered over $100 million in estates and trust assets.

Jeffrey is a frequent contributor to publications and periodicals, with recent articles having appeared in Bloomberg/BNA, Inc., The Washington Business Journal, and is a frequent speaker for NBI and myLawCLE.

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Section I. What is Insurance and Why would I want to create a Captive Insurance Company?
a) Brief history and overview
b) Types of Captives
c) Single Parent Captives
d) Closed homogeneous groups
e) Open homogeneous groups
f) Heterogeneous groups

Section II. Trends and Benefits of a Captive Insurance Company
a) Health Insurance
b) Micro Captives (831(b)
c) Tax benefits
        i. Deductions vs. Deferrals.
d) Non-tax benefits
        i. Lower insurance costs
        ii. Control
        iii. Investment Income
        iv. Enhanced loss prevention and claims management
        v. Risk Management
        vi. Market Condition Insulation
        vii. Risk Sharing

Section III. How to Identify Clients Who Are Good Candidates for a Captive Insurance Company
a) Mispriced Risks and excess profits for conventional Insurers
b) Surplus Lines
c) Risk Transfer vs. Risk Pooling
d) Micro captives (831 B)

Section IV. Which Jurisdiction Should be Used?

Section V. Asset Protection Issues
a) Captive Trends

Section VI. Insurance Requirements
a) Actuarial Studies
b) Capitalization
c) Risk Pooling
d) Audit

Section VII. Trends in the Law and Case Studies

Section VIII. IRS Pitfalls to Avoid

Section IX. Establishing a Captive Insurance Company

Section X. Administration of a Captive Insurance Company
a) Key contacts for administration

Section XI. Particular issues that arise
a) Who is the client?
b) Representing multiple parties in a transaction
c) Confidentiality and attorney-client privilege
d) Conflicts of interest and conflict waivers
e) Multijurisdictional issues; need for local counsel
f) Asset protection issues
g) Declining or terminating representation