Captive Insurance Company vs. Private Reinsurance (278)

General Description:

The program will review the §831(b) tax election, why it is problematic, and where it stands following the most recent Tax Court decisions, followed by an introduction to the benefits and uses of private reinsurance solutions. A private reinsurance structure offers risk management solutions to small to medium sized business owners and high net worth individuals, scaled to their size and risk appetite, for an affordable fee. Advisors should be particularly interested in risk management for possibilities such as supply chain interruption, contingent business interruption caused by events such as a pandemic, private tenant assurance programs, and warranty program protection.

Learning Objectives:

After completing this course the participant will be able to:

• Describe problems with the typical §831(b) captive insurance structure.
• Explain private reinsurance, its design, and suitable applications to clients, including how they really work and the retained risks for the company.
• Outline the four-part test for IRC compliance.
• List the types of risks that can be covered by a private reinsurance structure, and the key steps to set up and manage a private reinsurance plan.
• Discuss the ideal non-foreign domiciles.
• Determine which clients are best suited to private reinsurance over pure captive insurance.

Instructors:

Loren Hollingsworth is Director of Advanced Solutions and COO of Wealth Innovation Group in Utah. He is a consultant for financial advisors, CPAs, and attorneys on business consulting, risk mitigation, and advanced financial strategies, and an expert on §831(b), which applies to captive insurance companies and private reinsurance. He is also a life insurance specialist and a frequently sought presenter at financial seminars, conventions, and symposiums, including NAIFA (National Association of Insurance and Financial Advisors). Mr. Hollingsworth attended the U.S. Military Academy at West Point and earned his bachelor's degree at the George Washington University.

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