Helping clients leverage innovative strategies in ...Premiums paid by your company to the micro...

2
KRAUS-ANDERSON INSURANCE 831(b) MICRO CAPTIVES Helping clients leverage innovative strategies in alternative risk management Our team of captive consultants, legal counsel, and insurance experts specializing in 831(b) captives will work in partnership with your legal and accounting team to structure and manage your captive. Section 831(b) of the Internal Revenue Code was created to promote the establishment of small insurance companies. You can use this provision to benefit your company, first and foremost, by establishing an insurance company to fund risks that concern you. You are currently self-insuring a number of risks that cannot be effectively insured in the traditional marketplace. Risks with low frequency and high severity such as environmental, punitive damages, product recall, flood/earthquake and others are ideal candidates to place in the captive. A micro captive does not replace traditional insurance but is a way to augment your program for non-traditional risks. RISK FINANCING In addition to the primary benefit of providing insurance, this captive can also assist you in reducing your tax obligations. Premiums paid by your company to the micro captive are a deductible expense. The premiums are received tax free by the captive. Underwriting profits earned by the captive are tax exempt. Investment income is taxed as ordinary income. In order to be a good candidate for an 831(b), your business needs to be financially strong with the ability to pay premiums to the captive annually. TAX MANAGEMENT Kraus-Anderson Insurance | www.kainsurance.com | 952.707.8200

Transcript of Helping clients leverage innovative strategies in ...Premiums paid by your company to the micro...

Page 1: Helping clients leverage innovative strategies in ...Premiums paid by your company to the micro captive are a deductible expense. The premiums are received tax free by the captive.

KRAUS-ANDERSON INSURANCE 831(b) MICRO CAPTIVES

Helping clients leverage innovative strategies in alternative risk management

Our team of captive consultants, legal counsel, and insurance experts specializing in 831(b) captives will work in partnership with your legal and accounting team to structure and manage your captive.

Section 831(b) of the Internal Revenue Code was created to promote the establishment of small insurance companies. You can use this provision to benefit your company, first and foremost, by establishing an insurance company to fund risks that concern you.

You are currently self-insuring a number of risks that cannot be effectively insured in the traditional marketplace. Risks with low frequency and high severity such as environmental, punitive damages, product recall, flood/earthquake and others are ideal candidates to place in the captive.

A micro captive does not replace traditional insurance but is a way to augment your program for non-traditional risks.

RISK FINANCING In addition to the primary benefit of providing insurance, this captive can also assist you in reducing your tax obligations.

Premiums paid by your company to the micro captive are a deductible expense. The premiums are received tax free by the captive. Underwriting profits earned by the captive are tax exempt. Investment income is taxed as ordinary income.

In order to be a good candidate for an 831(b), your business needs to be financially strong with the ability to pay premiums to the captive annually.

TAX MANAGEMENT

Kraus-Anderson Insurance | www.kainsurance.com | 952.707.8200

Page 2: Helping clients leverage innovative strategies in ...Premiums paid by your company to the micro captive are a deductible expense. The premiums are received tax free by the captive.

Committed to providing clients with the best coverage for them at the most competitive price.

KRAUS-ANDERSON INSURANCE420 Gateway Blvd Burnsville, MN 55337952.707.8200

[email protected]

Get in touch _

420 Gateway Blvd Burnsville, MN 55337

952.707.8200 - Direct952.890.0535 - Fax

[email protected]