Katten's Captive Insurance attorneys handle all aspects of captive insurance programs for closely held businesses. We advise all types of captive insurance companies, including single-parent and pure captives, association captives, group captive programs, risk purchasing, and sponsored and branch captives.
Our familiarity with the goals and needs of owners of closely held businesses and how a captive insurance program assists the business from a risk management perspective allows us to guide clients through each phase of establishing a captive insurance program. Our work includes the following areas below.
Our knowledge of the insurance regulatory and compliance area, combined with our heritage as a provider of sophisticated transfer tax strategies for high-net-worth and ultra-high-net-worth clients, distinguishes us as a national service provider with access to international securities, benefits, litigation and tax attorneys, and authorities on all types of alternative risk management techniques. Our relationships with key regulators worldwide, including the domiciles of Delaware, Nevada, Vermont, Utah, the District of Columbia, the Cayman Islands and Bermuda, ensure that we understand the perspective of the regulator before we submit an application for a client. We advise on:
If a client already has a captive insurance program or is participating in a sponsored or group captive program, we consult with the client on the arrangement to determine if the program can be enhanced to better serve the needs of the business.
Katten's Captive Insurance group consults with clients on the income tax considerations associated with a captive insurance program from both federal and state perspectives. We counsel our clients on the key components the Internal Revenue Service (IRS) and the courts look to in determining whether a captive insurance program will be respected for federal income tax purposes. We also advise on various insurance-related elections that may be available—particularly the 831(b) election for small captive insurance companies and the 953(d) election for foreign companies to be treated as US taxpayers. At the state level, our team counsels business owners on the application of self-procurement rules and the potential application of the direct procurement rules to the captive insurance company.
Our attorneys spend substantial time with clients addressing the ownership aspects of a captive insurance company. We design insurance programs to minimize any gift tax consequences of the transaction, allowing for an amount of leverage that is rarely found in transfer planning techniques. We also advise clients on how to use the ownership of a captive insurance company as a management incentive tool for key personnel and as a means to encourage implementation of significant risk management practices in the company.