private insurance company - captive alternatives · protected captives author: david kirkup created...
TRANSCRIPT
PRIVATE INSURANCE COMPANYTurning Risk into EquityMark Sims
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vWhat are Private Insurance Companies?
TYPES OF BUSINESS RISK
Commercial Insurance• High frequency / Low Value• Typically buy insurance• Many Small Claims - WC, GL, Employee
Benefits
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Private Insurance Company• Low Frequency/ High Value
• Typically ignore and hope for best
• Few Large Claims - Cyber, Brand, Regulatory…
HIDDEN RISK IN YOUR BUSINESS
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5
MOST COMMONLY SELECTED COVERAGES
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vHow Does it Work?
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PREMIUM FLOW
Insured Business•Pays
Premium to Licensed Insurer
Insurance Company
(Madison International)
•Issues Policies to Insured
Reinsurance Company
(MadRE)
•Provides Risk Distribution and Cell structure
Protected Cell •Assumes Insured Risk
Business OwnerWarrant Holder
of PC
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RISK & PREMIUM FLOW
Entity
Insured
MADISON INTERNATIONAL
MADISON RE I.I.
Protected Cell
Cash Flow
Premium
100% of Premium
40% Held for 1 Year
60% Immediately
Risk Distribution
100% of Risk
100% of Risk
50% to Claim Pool
50% to Protected Cell
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PC 999
PC 001
PC 002
PC 005
PC 004
PC 003
MadRE
Puerto Rico
Separate cells
Tax Benefits
Risk Sharing
Madison International
STRUCTURE
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Formation Process
FeasibilityData
ImplementSelect
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• One time start up cost: $6,000 per $100K - maximum of $60K
• Capital pledge required: 1/3rd of PC premium
• All-in Management Fee: 8% -10% depending on premium size
• Set up time: In Puerto Rico one week (typical insurance manager: 60 –
90 days)
A very efficient and fast-track process to establish a PrivateInsurance structure.
1155 Mount Vernon HighwaySuite 800Atlanta, GA 30338
p: 404-823-6200c: 812-327-3341f: 678-366-2458
Captive Alternatives, Captive Alternatives LLC, or any of its affiliates or referral sources, do not give legal, tax, accounting or investment advice. You will need to obtain independent legal, tax or investment advice for this proposed Captive. Your business will obtain this advice from its licensed CPAs, tax or legal professionals. All Pro Formas are Examples Only. Individual Results Will Vary. Also note: tax rate indicated is only for present estimated federal tax rates; state tax rates or possible direct procurement taxes are not addressed due to differences between the States.
MARK SIMSVP OF BUSINESS DEVELOPMENT