Captives

We work with virtually every type of captive in jurisdictions around the world – whether you are a single parent, group, stock, mutual, reciprocal, cell, risk retention group (RRG) or risk purchasing group (RPG), we can help.

We can advise you on the establishment and operation of facilities to pool captive risk.  We assist with insurance documentation, including policies, reinsurance agreements, letters of credit, and trust agreements. We advise on the utilization of captives to reinsure welfare benefits, including advice regarding the securing of a prohibited transaction exemption (PTE) from the US Department of Labor.

Tax considerations can be critical in evaluating captive solutions, and our tax experience includes dealing with federal tax issues such as insurance characterization and deductibility of premiums, state issues including direct placement/self-procurement tax issues. We will also provide regulatory advice for all issues affecting captives and the risks written by captive insurers. If you are in a jurisdiction where we do not have a presence, we will coordinate with local counsel.

We form cells and cell companies (including regular cells and incorporated cells) and  provide advice on their use. We can also advise you on mergers, re-domestications, liquidations, commutations, indemnity reinsurance, and assumption reinsurance (novations) of captive insurance companies, including the tax aspects of such transactions. We can assist with the insurance products typically provided by captives (such as deductible reimbursement arrangements, extended warranty products, etc.) and have lawyers in the firm with additional experience in the related insurance regulatory issues, securities law, finance and employee benefits/ERISA. We also advise you on claims and disputes.