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Captive Resources Presentation – June 13, 2012


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Captive Resources Presentation – June 13, 2012

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Captive Resources Presentation – June 13, 2012

  1. 1. Introduction to Micro Captives & the 831(b) Election
  2. 2. Presenters: • Tom Ullrich – Captive Resources • Ernie Achtien – Captive Resources • Matthew Howard – Moore, Ingram, Johnson & Steele • Doug Butler – Moore, Ingram, Johnson & Steele • Bill Johnson – Moore, Ingram, Johnson & Steele • Joe Herbers – Pinnacle Actuarial Resources • Rob Walling – Pinnacle Actuarial Resources
  3. 3. Today’s WebinarToday’s Webinar  Overview of 831(b) Election  Captive Structure  Flow of Operations  Premium Funding  Financial Requirements  Next Steps
  4. 4. 831(b) Election831(b) Election Under Section 831(b) of the Internal Revenue Code, insurance companies that write $1.2 million or less in annual premium only pay income tax on investment income. This means that underwriting profits can accumulate in the insurance company on a tax-deferred basis.
  5. 5. Qualifying FactorsQualifying Factors  First & foremost : this is an insurance company  $1.2 million ceiling on annual premium income  Design the insurance to fit individual needs  Pre-Tax earnings of at least $1.5 million  Viable for closely held or public companies
  6. 6. How does the captive work? Micro CaptivesMicro Captives
  7. 7. 7 Captive Insurance Companies Presented by: MATTHEW J. HOWARD, JD, LL.M. MOORE INGRAM JOHNSON & STEELE, LLP Emerson Overlook 326 Roswell St Marietta GA 30060 (770) 795-5022; (850) 231-5995; cell: (404) 771-0202
  8. 8. 88 Captive vs. Small Companies  “Captive” means the insureds of insurance company are affiliated with the owners of the insured company(ies)  “Small” means the insurance company falls under one of the sections of the tax code controlling small insurance companies. We will focus here on IRC Sec. 831(b).
  9. 9. IRC Sec. 831(b)  831(b) Alternative tax for certain small companies  (1) In general  In lieu of the tax otherwise applicable under subsection (a), there is hereby imposed for each taxable year on the income of every insurance company to which this subsection applies a tax computed by multiplying the taxable investment income of such company for such taxable year by the rates provided in section 11 (b).  (2) Companies to which this subsection applies  (A) In general  This subsection shall apply to every insurance company other than life (including interinsurers and reciprocal underwriters) if—  (i) the net written premiums (or, if greater, direct written premiums) for the taxable year do not exceed $1,200,000, and  (ii) such company elects the application of this subsection for such taxable year.  The election under clause (ii) shall apply to the taxable year for which made and for all subsequent taxable years for which the requirements of clause (i) are met. Such an election, once made, may be revoked only with the consent of the Secretary.
  10. 10. 1010 CIC Taxation IRC 831(b) provides that:  Insurance companies with less than $1.2 million of annual premium pay $0 income tax on insurance profits.  Investment income is taxed as income to C- corporation  831(b) must be timely elected and cannot be revoked without the permission of the Secretary
  11. 11. 1111  Profitable business pays up to $1,200,000 in premiums each year  Premiums may be deductible under sec. 162 Profitable Business Tax Treatment of Premiums CIC
  12. 12. 1212 Captive Insurance Company – 831(b) Provides insurance coverage for various risks $500k* to $1.2 million of annual insurance premiums * Practical not statutory Business CIC Business Owners Business Owners
  13. 13. 13 Economic Family Doctrine  Adopted by the IRS in 1977 (Rev. Rul. 77-316)  Parent corporations and their subsidiaries form an economic family.  If the ultimate burden of loss is retained in the family, there is no risk shifting or risk distribution (requirements to be considered insurance as set forth by the Supreme Court in Helvering v. LeGierse, 312 U.S. 531 (1941))  Therefore, premium payments are treated as capital contributions or dividends and are not deductible under Sec. 162
  14. 14. 14 Economic Family Doctrine  IRS’ economic family doctrine was not accepted by the courts (See Humana Inc., 881 F. 2d 247)  IRS abandoned doctrine in Rev. Rul. 2001-31  Adopted instead a facts and circumstances approach for determining if transactions constitute insurance (See Malone & Hyde, Inc., 62 F.3d 835, 76 AFTR2d 95- 5962 (CA-6, 1995), rev’g TCM 1993-585)  IRS continued to apply facts and circumstances test (See TAM 200149003, FSA 200202002, Notice 2002- 70)
  15. 15. 15 Risk Distribution  Risk Distribution – does the insurance company distribute its risk to other insureds?  Rev. Ruls. 2002-89 (50%); 2002-90 (12 subs or no more than 15% of total premium); 2002-91 (Group Captive-7 unrelated insureds)  Harper Group and Includable Subsidiaries v. Commissioner, 96 T.C. 45 (1991): Because the CIC had at least 30% unrelated third party risk, the arrangement constituted insurance  Rev. Rul. 2005-40: risk distribution requirement is met if CIC has 12 or more insureds (10% risk distribution insufficient; DRE disregarded for RD)  Affiliated companies count, but not single-member LLCs  Compare to Humana, Inc. v. Commissioner, 881 F.2d 247 (6th Cir. 1989) in which sums paid to parent company’s Captive Insurance subsidiary, on behalf of several dozen parent company subsidiaries was sufficient risk distribution to constitute insurance 15
  16. 16. Achieving Risk Distribution under Revenue Ruling 2002-89 Operating Business A Terrorism Insurance Provider (“Pool”) Operating Business A’s Captive Operating Business B Operating Business B’s Captive Operating Business C’s Captive Operating Business C Operating Business D Operating Business D’s Captive • Each Operating Business will pay 50%+ of its captive premium to the Pool in return for terrorism coverage. • The Pool then reinsures its risk with each Operating Business Captive in the same percentage that the Operating business’s premium represents. •Example: Assume Operating Business A pays $200k to the Pool and that $200k premium represents 2% of all premiums received by the Pool. The Pool will then pay Operating Business A’s Captive $200k to reinsure 2% of the Pool’s total risk (i.e. 2% of all of the other participating Operating Business’s risk).
  17. 17. Achieving Risk Distribution under Revenue Ruling 2002-90 Related Entity 2* Related Entity 4* Related Entity 3* Related Entity 1* Related Entity 5* Related Entity 6* Related Entity 7* Captive Insurance Company (“Captive”) •Related entities pay premiums directly to the Captive for various lines of P&C insurance. •Each Related Entities premium cannot be less than 5% nor more than 15% of the total premiums received by the Captive. *Related entity must not be considered a disregarded entity
  18. 18. 1818 Recent IRS Guidance  December 31, 2004 - IRS releases rulings showing non-sham, bona fide captive insurance companies (TAMs 200453012 & 200453013)  Rev. Rul. 2005-40, 2005-2 CB 4. A company that insures a single corporation cannot be an “insurance company”, even if the insurer is unrelated to the insured, premiums are arm’s length and the insurer is adequately capitalized, since there is no risk distribution.
  19. 19. Recent IRS Guidance (cont)  Ltr. Rul. 200644047. An insurance subsidiary insured the risks of its parent. Although various physicians performing work for the parent were also insured, the Service concluded that the risks insured were essentially that of the parent. (Rev. Rul. 2005-40)  TAM 200816029. For purposes of applying Rev. Rul. 2005-40, the common GP of several ltd. partnerships is treated as one insured.  PLR 200907006. Service concluded that there was adequate risk distribution to warrant the company being treated as an insurance company. (Rev. Rul. 2002-91)
  20. 20. Recent IRS Guidance (cont)  PLR’s 200950016 & 200950017. Service finds reinsurance pools adequately satisfy risk distribution requirements as provided in Rev. Rul. 2002-90.  PLR 201030014. Service finds that a Small Captive (831(b)) is recognized as a valid insurance company. “Risk distribution incorporates the statistical phenomenon known as the law of large numbers. Distributing risk allows the insurer to reduce the possibility that a single costly claim will exceed the amount taken in as premiums and set aside for the payment of such a claim.”
  21. 21. 2121 Why Own a Small Insurance Company?  Estate Planning  Best practice: CIC owned by dynastic trust for heirs  Jurisdiction shopping for unlimited Rule Against Perpetuities: AK,DE,FL(360 yrs)  Can structure to allow client shared access to investments  Buy-out Retirement Planning  CIC can tie into a business buy-out/retirement plan/employee benefits  More tax efficient than traditional methods  Tax Planning  Premiums can be tax deductible  Benefit to family can be estate/gift tax free  Profit can be accessed at lower tax rates
  22. 22. 2222 Risk Management Concept Each business or practice has risks that it currently does not insure against, including:  Deductibles & co-payments in existing policies:  Medical malpractice  Excess Liability  Environmental Liability  E&O, D&O, and others  Liability risks for which there is no coverage  Employee claims, partnership liability, government liability, etc.  Economic risks for which there is no coverage  Loss of income, revenue cutbacks, loss of key person, loss of a key contract, etc.
  23. 23. 2323 CIC with Advanced Planning Insurance coverage $500k to $1.2 million premiums Business CIC Owned by Dynastic Trust for Heirs Business Owners Can be structured for efficient estate planning, retirement access and partner buy outs, etc. Investment LLC for CIC Assets Shareholder
  24. 24. 2424 Buy-Out and Retirement Concept Business owners and employees are always looking for tax efficient ways to transfer wealth during buy-ins of younger partners and buy-outs of older ones.  A business can create an internal buy-out plan using the CIC reserves.  With particular structures, funds can be accessed by senior (retiring) partners during their lifetime in a tax-favored manner.  The total retirement benefit from such arrangements can be significant.  Operating business or practice will pay tax deductible premiums to the CIC owned by the senior partners so funds will accrue to older owners’ for their retirement.
  25. 25. 2525 Tax Planning Benefits 1. Deductibility of premiums §162/§212  Assuming premiums are market comparable or can be valued by an actuary 2. Taxation of CIC’s profits  831(b) provides tax exemption from premium tax and from underwriting profit.  831 (b) must be elected timely and cannot be revoked without permission of Secretary  Federal Tax on investment income only 3. Retirement  Certain investments and structures could allow client to access CIC invested funds tax efficiently. 4. Estate/Gift Taxes  Could transfer millions to heirs tax efficiently.
  26. 26. 2626  Premiums and policies must be market-comparable  Actuarial support needed  Insurance formalities complied with  Risk distribution must be present  Initial Capitalization required  4:1 (premiums to capital) with certain minimums  Gift tax return Form 709 The Ground Rules
  27. 27. 27 Domicile Considerations  Form CIC in US Domicile, which would include several states such as KY, DE, HI, UT or MT.  Favorable Captive legislation regarding fees and investment options  Minimize Premium Taxes and Ongoing Fees.
  28. 28. 2828 Captive Insurance Company Policies  Everything a business currently self-insures:  Deductibles  Excess losses above coverage limits  Environmental Liability  Loss of income as a result of:  Losing key employee/salesperson  Loss of license/professional risks (professionals)  Loss of a key contract (Gov’t. contractors)  Weather, terrorism, etc.  Liability defense expenses:  Employee lawsuits – sexual harassment, wrongful termination, discrimination, etc.  Environmental issues  Professional claims  Suggest Focus on First Party Liability
  29. 29. Examples of Captive Insurance Policies Written  Professional liability Gap Coverage  HIPAA/Billing Audit Liability  Contractual Liability  Cyber Liability  Environmental Liability  Excess Environmental Liability  Labor Shortage/Strike Loss Reimbursement  Employment Practices  Employee Dishonesty  Patent Infringement/Intellectual Property  General Liability Gap  Property Management Professional  Professional Misconduct  Product Recall  FDA Administrative Actions Liability  Product Liability Gap  Directors and Officers Liability  Punitive Damages  Loss of Key Employee  Wind Deductibles on Property
  30. 30. 3030 Greater Leverage for Larger Clients  Clients’ children (or trusts) can own CICs  Each child (or trust) can own one CIC (children under age 21 are attributed to their parent)  Client can still be the manager of the CIC and control the investments of CIC  Effectively, this option saves current income taxes (35%-47%) to client and future estate taxes (35%) on net proceeds  Children will only pay capital gains or dividend tax rates (currently 15% federal) in future
  31. 31. 3131 Highly Profitable Business Insurance Company #1 Trust for Child #1 or for Children of Owner #1 Insurance Company #2 Trust for Child #2 or for Children of Owner #2 Insurance Company #3 Trust for Child #3 or for Children of Owner #3 Parent’s Business could pay up to $1.2 million per year into EACH child’s CIC or into a CIC for each owner’s children. §1563 attribution rules apply . Children under age 21 are attributed to the parent. Multiple CIC Structure
  32. 32. 3232 Real Life Example – Results Do Nothing with $1.2M  No risk management, profit, asset protection, buy-out/retirement benefits of CIC  Earn money, income taxes  Taxable/tax deferred investments  Die, pay estate taxes CAPTIVE 831(B) Risk management, profit, asset protection, buy- out/retirement benefits of CIC  Create dynastic trust to own CIC  CIC invests in tax deferred investments  Tax efficient withdrawals from LLC
  33. 33. Income Tax with No Captive Filing Status Joint Joint Joint Personal Exemptions 2 2 2 ------------------------------------------------------ Ordinary Income 1,200,000 1,200,000 1,200,000 ------------------------------------------------------ Adjusted Gross Income 1,200,000 1,200,000 1,200,000 ------------------------------------------------------ Standard Deduction 11,600 11,600 9,650 ------------------------------------------------------ Taxable Income 1,181,000 1,181,000 1,190,350 ------------------------------------------------------ AMTI Net of Exemption 1,200,000 1,200,000 1,200,000 ------------------------------------------------------ Schedule or Table Tax 383,222 383,222 435,439 Tentative Minimum Tax 332,500 332,500 332,500 ------------------------------------------------------ Net Federal Tax 383,222 383,222 435,439 ------------------------------------------------------ State Tax 71,560 71,560 71,560 ------------------------------------------------------ Total Net Tax Liability 454,782 454,782 506,999
  34. 34. Income Tax Benefits with Captive Year 1 Year 2 Year 3 Cash Non-Captive Scenario Premiums 1,200,000 1,200,000 1,200,000 3,600,000 3,600,000 No Premium paid Savings Tax (tab 2) 460,000 460,000 510,000 1,430,000 (1,430,000) Tax Costs Mgmt Fees (90,100) (83,500) (83,500) (257,100) Tax benefit 36,040 33,400 33,400 102,840 Net Savings 405,940 409,900 459,900 1,275,740 Projected Earnings @ 3% 36,000 36,000 - 72,000 151,900 Earning @ 7% on after tax dollars Projected Cash Balance Prior to liquidation 3,517,740 Capital Gain Tax on Liquidation (703,548) Net Cash Available 2,814,192 2,321,900 Estate Tax Obligation - (812,665) Net Cash After All Taxes 2,814,192 1,509,235 Increase in net worth after all expenses 1,304,957
  35. 35. 3535 MIJS Implementation Team  MIJS Captive Management, LLC, KY LLC  Matthew J. Howard, JD, LL.M., Senior Tax Partner, Moore Ingram Johnson & Steele, LLP  Bill Johnson, JD, liability attorney; Moore Ingram Johnson & Steele, LLP  Alec Galloway, JD, liability attorney; Moore Ingram Johnson & Steele, LLP  Douglas W. Butler, Jr, JD, corporate/trusts and estate attorney, Moore Ingram Johnson & Steele, LLP
  36. 36. Matthew J. Howard, JD, LL.M, MIJS, LLP Partner Matthew has been practicing law since 1989 and working with Micro Captives since 2004. He heads up the firm's tax section. Matthew's team insures all IRS rules are complied with in setting up and managing their micro captives.
  37. 37. William R. Johnson MIJS, LLP Partner Bill has been a practicing attorney since 1983 and involved with insurance coverage and captive insurance companies since that time. He has been directly involved in micro captives since 2006.
  38. 38. Alexander T. (“Alec”) Galloway III MIJS, LLP Partner Alec has been a practicing attorney since 1993 and involved with insurance coverage and captive insurance companies since that time. He has been directly involved in micro captives since 2006.
  39. 39. Doug W. Butler Doug worked in the life insurance industry before becoming an attorney in 2009. Since that time he has worked in MIJS’s corporate and tax departments and has been involved in formation and management of all of MIJS’s micro captive insurance companies.
  40. 40. Adon J. Solomon Adon has been practicing law since 2008 and joined Moore Ingram Johnson & Steele in 2010 focusing his practice in the areas of trusts and estates, tax and asset protection planning, along with assisting clients in the formation and management of micro captive insurance companies.
  41. 41. Bram L. Scharf Bram was admitted to practice law in Florida on January 5, 1995. As part of the Captive Insurance Team at MIJS, Bram prepares insurance policies and declaration pages to suit the individual needs of the client.
  42. 42. Insured Captive ResourcesCaptive Resources  Independent consultant to the captive  Coordinate/oversee all activities and service providers  Underwriting coordination and assist in pricing development  Financial services- oversee financial process and tax reporting  Board meeting facilitation  Develop and implement program enhancements  Legislative oversight
  43. 43. Captive FlowCaptive Flow Broker  Oversees insurance program  Provides Current Policies to MIJS  Bills premiums  Prospect development Insured
  44. 44. Pinnacle Actuarial Resources  Leading U.S. Property & Casualty Actuarial Consulting Firm  Actuary to all Captive Resources/Kensington group captives  Key Personnel Joe Herbers Rob Walling Managing Principal Principal  Microcaptive/831(b) Services  Funding Studies to 831(b) and Pooling Mechanism  Loss Reserve Analyses  Statement of Actuarial Opinion and Other Regulatory Compliance
  45. 45. what is my investment? CapitalizationCapitalization
  46. 46. CapitalizationCapitalization Capitalization Cash or Letter of Credit (“LOC”) Minimum 4:1 Ratio $1,000,000 Premium $250,000 Capital* *State Requirements Vary
  47. 47. About the CaptiveAbout the Captive  Annual Board meeting conducted via teleconference  Focusing on DE as common domicile  Owner of captive need not be insured corporation  Investments individually managed, but must meet regulatory guidelines  Utilizing Ernst & Young for 831(b) tax preparation  Utilizing Pinnacle Actuarial Resources for premium support
  48. 48. what’s next?
  49. 49. Underwriting ProcessUnderwriting Process  Copies of All Current Policies  Complete MIJS Application  Company Brochures  Current Financial Statements (With Current Clients’ Consent we can have these forwarded by John Flanagan) Data needed:Data needed:
  50. 50. Underwriting ProcessUnderwriting Process Capitalization check received Captive decision completed Policies issued 831(b) Funded Premium Support Presented Actuarial ReviewPolicies ReviewedData collected
  51. 51. ExpensesExpenses  Initial feasibility study at no charge  Implementation costs: $85,000 to $90,000  Annual costs: $80,000 to $85,000  No additional fees for tax or estate planning work with MIJS.
  52. 52. your questions? Micro Captive
  53. 53. 53 Captive Insurance Companies: Frequently Asked Questions Presented By: Matthew J. Howard, JD, LLM Moore, Ingram, Johnson & Steele, LLP
  54. 54. 5454 Frequently Asked Questions  Q: What is the minimum number of affiliated entities I need to have to achieve adequate risk distribution? What happens if I do not have enough affiliated entities? Can I still utilize a Micro-Captive?  A: An insured with at least 7 entities can achieve adequate risk distribution without invoving the risks of other unrelated businesses. Most of our clients do not have this structure and enter into our risk pool with other companies. Only our clients participate in our pool which allows us to maintain control.
  55. 55. 5555 Frequently Asked Questions  Q: Can my Micro-Captive insure the risks of unaffiliated entities or entities affiliated with a Group Captive program I participate in? Could this help me achieve adequate risk distribution, if allowed?  A: Yes. Most of our Captives enter into a reinsurance agreement whereby they agree to insure the risks of unrelated businesses under a policy of insurance which we have written.
  56. 56. 5656 Frequently Asked Questions  Q: Does my company need to pay the full $1.2M in premiums a year to the Micro-Captive? What is the minimum amount my company can pay for the Micro-Captive planning to make sense? What if my company can pay over $1.2M in premiums?  A: The election under IRC Sec 831(b), which permits premium income to be tax free, requires that the annual net premiums be $1.2M or less. The commitment is year to year under a 12 month policy of insurance. Therefore the amount paid by the operating company, as well as the insurance coverage can change from year to year. There is no minimum and a business can take up to three years grace period of paying zero premium and keep the captive in place. We believe over time that an average of $500K per year or more makes the most economical sense.
  57. 57. 5757 Frequently Asked Questions  Q: Are there any requirements as to what type of entity the Insured must be (C-Corp, Partnership, LLC)? Does the Micro-Captive have to be a C-Corp?  A: No. The insured can be any type of entity. C Corp, S-Corp, LLC tax as a partnership, LLC taxed as a corp and even a sole proprietorship. The Captive must be a C-Corp.
  58. 58. 5858 Frequently Asked Questions  Q: Who can be the owner of the Micro-Captive? Is the Insured the owner? Can the Shareholders of the Insured be the owners? Can key employees or other individuals or entities be an owner?  A: Anyone can own the Captive. Most of our clients have their captive owned partially or entirely in a dynasty trust for their heirs to take advantage of the tremendous benefits in avoiding estate and gift tax laws. A captive owned by an LLC with the key employees as members of the LLC allows the employer to create golden handcuffs for key employees on a discriminatory basis.
  59. 59. 5959 Frequently Asked Questions  Q: Can an ESOP be used in connection with a Micro-Captive? Can the Micro-Captive be owned by the ESOP?  A: Yes. It makes the most sense for a company that is partially owned by an ESOP. Most ESOP owned companies are S Corps and an S Corp owned 100% by an ESOP is not subject to tax so the 831(b) benefits are lost. The best way to structure ownership of the captive is in a brother-sister arrangement rather than parent-subsidiary.
  60. 60. 6060 Frequently Asked Questions  Q: Are there any limitations as to the type of insurance risks or liabilities the Micro-Captive can insure? Are there any types of businesses of an Insured that would disqualify it from setting up a Micro-Captive?  A: A captive can insure any uninsured risk of any operating business. As long as there exists a “fortuity of loss” than such loss can be insured. Fortuity, a contingency or uncertainty with respect to the risk insured, is a requirement of all insurance contracts.
  61. 61. 6161 Frequently Asked Questions  Q: Can a Micro-Captive write policies to insure fines levied by the state or Federal government (such as OSHA or EPA fines)? Can the policies insure punitive damages?  A: Yes. These are all insurable and types of policies we have written.
  62. 62. 6262 Frequently Asked Questions  Q: Can health insurance premiums be included in the Micro-Captive planning? Would it be appropriate for the Micro-Captive to provide Umbrella coverage or excess Umbrella coverages?  A: No, primarily for two reasons: 1. State laws require certain regulations that would prohibit a micro captive from insuring this risk; and 2. the micro captive is too small to take on this much risk. A micro Captive is also too small to take on umbrella coverage, at least in the early years.
  63. 63. 6363 Frequently Asked Questions  Q: What is the role of an agent or broker when setting up a Micro-Captive?  A: They play a helpful role in helping us identify uninsured risks of the business and ongoing helping us coordinate the captive with the commercial coveragees.
  64. 64. 6464 Frequently Asked Questions  Q: What can be done with the premiums received by the Micro-Captive? Can these funds be invested? Are their limitations as to the investments? How are investments taxes to the Micro-Captive?  A: The premiums received by the Captive are invested by the Captive owners. We do not provide investment advice but can certainly make needed introductions to investment experts. The States we work in, like Delaware, are very liberal in what the captive can invest. The Captive does have to pay income tax on investment income so tax free and tax deferred investment are very popular.
  65. 65. 6565 Frequently Asked Questions  Q: What happens if I sell my company and I have a Micro-Captive set up? What happens to the Micro- Captive? Can a publicly traded company set up a Micro-Captive?  A: The Captive usually just ceases to be a licensed insurer and is then a regular corporation with investments. The Captive can be liquidated or can acquire another business. Yes, a public company can form a captive.
  66. 66. 6666 Frequently Asked Questions  Q: Who are the other members of the reinsurance pool? Do we have the opportunity to exclude members if we feel they are too great a risk?  A: Our other Captive clients who need risk distribution. Yes, every participant gets basic information about the other participants and you can refuse to insure certain companies.
  67. 67. 6767 Frequently Asked Questions  Q: What is the difference between a Micro-Captive domiciled in a US jurisdiction (such as Delaware) versus a company domiciled offshore (such as in the Cayman Island)  A: The main difference is the State domiciles are more strict and have more regulations to follow. There is the opportunity for abuse with a micro captive (unlike the large group Captives) and therefore we like the idea of more regulation for a micro captive.
  68. 68. 6868 Frequently Asked Questions  Q: Who handles the insurance claims made against the Micro-Captive? Who manages the Micro-Captive and ensure it functions correctly and remains in compliance with all state and federal laws?  A: Our management company, MIJS Captive Management handles all claims and administration. Captive Resources assists us with Board Meetings and financial accounting. We coordinate the actuarial and financial audits along with all State filings.
  69. 69. 6969 Frequently Asked Questions  Q: Are there additional capital contributions required beyond the $250,000.00 initial capital?  A: No.
  70. 70. 7070 Frequently Asked Questions  Q: What is an estimate of the typical ongoing fees to maintain the Micro-Captive?  A: $76,000/yr for everything including the annual tax return and State premium tax.