It’s not always about taxes
Congress deemed the growth of small private insurance companies to be a desirable public policy and created the 831(b) rule more than 30 years ago. Subsequent studies show that captives benefit the economy through greater small business stability, and stable employment. Indeed, Congress recently proposed increasing the upper limit on allowable premium for 831 (b) captives.
In any type of business activity, taxes are important. But you should never make a business decision solely because of tax rules. Whether it be the purchase of a new building, the construction of a new bridge or a ride on a moon shot – tax rules can and will change. Your primary objective should always be to ensure a positive ROI. The same rules hold for a Protected Captive™.
Protected Captives™ are private insurance companies with often complex rules and obligations that require a long term approach to funding. With CapAlt doing the heavy lifting, we can ensure that your experience with Protected Captive ownership is positive and rewarding.
Efficient asset growth
Despite effective risk management efforts, business owners annually subsidize traditional insurers’ operations and create significant profits for insurers – without sharing in those financial benefits. Other than insurance coverage, premiums merely mark the outflow of scarce cash.
In contrast, a Protected Captive from Captive Alternatives is an insurance company created for the benefit of its owners. By owning a Protected Captive, business owners can turn costly premiums into financial assets for the benefit of the company and its operating entities.
Because Protected Captives operate as a traditional insurance company, they can qualify for government-provided tax incentives that are intended to promote the growth of small insurance companies.
Captives can also grow reserve surpluses at a steady, tax deferred pace. The captive’s excess surplus funds can be distributed or accessed by the business owner on their own time frame, and may be used to invest in expansion and for other financial needs of the business or its operating entities.
Protected Captives and CapAlt
However financially advantageous Protected Captives are for their owners, the impact of operating a captive is best determined through extensive evaluation by a team of financial and insurance experts. That’s where CapAlt comes in.
After extensive due diligence on world insurance markets, CapAlt’s captive experts concluded that Puerto Rico offers the ideal platform for Protected Captives’ creation and operation. In fact, CapAlt has already relocated the assets of more than a hundred Protected Captives to Puerto Rico, where streamlined regulation enables fast concept-to-operation.