Captive insurance company or insures are basically are subsidiary to a parent company. It is primarily a risk management technique that helps the person for re insurance from their subsidiaries. It is a risk financial tool that helps insurers to adjust their negative impact on the primary insurance. This is preventive measure for parent insurance company that prevents their loss by allowing captive insurance. Insurance company whether big or small has the problem and that is necessary to cover their coverage risk. Since the premiums are growing yearly the insurance coverage are becoming very difficult to the provider company. Many companies cannot provide their claim in time. There is four or five type of insurance for captive insurance. The single parent captive, association captive, group captive, agency captive and rent-a captive are basic captive insurance that are available for necessary requirement of people. Captive insurance is basically a re insurance which is provided by a subsidiary of the parent company. The premium in captive insurance is less because they manage with the parent company’s profit. The method is simple and quiet flexible and provide low premium deposit. However, their norm of flexibility depends on the prevailing market norms. However there are two types of captive insurance available that is the branch captive and the agency captive. The captive insurance companies are growing fast. The reason is that they are owned or affiliated to a parent and big insurance company. They have their particular tax benefits that are not provided to other company. Captive insurance company provides the amount of premium to the parent company and retains the incoming profits. However, it is essential to take the advice of tax lawyer before venturing into such scheme. The system is complex and need expert advice. The scheme may affect the income tax liability. The reason for floating captive insurance company by a parent company has basic reasons to protect business risk. However, the premium paid to such subsidiary are deductible as business expense as per the Internal Revenue Service. The investment return is received straight on the invested capital. Therefore, it is essential to take the guidance from the risk management advisor who will provide you with adequate knowledge about the system and its pros and cons. There are varieties of captive insurance available and from many providers in the internet. But the best and consistent provider is captiveadvisors.com. They will provide all the assistance necessary and the knowledge required for the captive insurers.
