association captives

Understanding Captive Insurance Companies

[caption id="attachment_99" align="alignleft" width="300"]captive consulting captive consulting[/caption] If a parent company is ever unable to locate an outside firm in order to financially protect them from a business risk, they can then choose to form a captive insurance company. Whether or not the original parent company will be eligible for a tax break for implementing a captive insurance company will depend on how the captive insurance company classifies their transactions. If you think that you might benefit from a captive insurance company, make sure that you first turn to a professional and experienced captive consulting firm. Making the Change to a Captive Insurance Company Even though there are several advantages of setting up a captive insurance company, the original parent company will want to carefully examine the personal cost of establishing a captive insurance company. There’s always the chance that some of the risks that the parent company might take on could lead to larger expenses than they’re actually ready for, which could possibly lead to financial ruin. One of the main reasons that larger private insurance companies are less likely to go bankrupt from one event is because they have a more diversified pool of risk. To find out more about captive insurance companies, be sure to visit a captive consulting firm to explore your options and find out whether or not you can truly benefit from a captive insurance company.

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