May 2024 Edition

This month, I am not going to talk about commercial insurance rates. Instead, we will focus on some positives that have been happening in the world of captive insurance.

First, there was another victory for captives, as the IRS tried to enforce penalties that go against the laws of the United States. One would think the IRS would look at the laws in place before putting companies through the court system.

The other good news is that North Carolina has been increasing the number of captives in the state. They are now ranked third in most active captives, behind Vermont & Utah. Keep in mind, they did this in 10 years.

Lastly, make sure you take some time out this Memorial Day (5/27) to remember those who lost their lives protecting our way of life and the freedoms that our forefathers gave us.

Please get in touch with me if you have any questions regarding forming a captive or other captive insurance matters.

Sincerely,

Larry Papola

Lawrence J. Papola, Jr.

President

LPapola@US-Captive.com

1-833-US-CAPTIVE

(1-833-872-2784)

RMC Group Wins Against IRS

in Captive Dispute

A Florida federal jury has ruled in favour of RMC Group in a captive dispute against the Internal Revenue Service (IRS).

In the verdict, the jury cleared RMC Group, owned by Raymond Ankner, from penalties under Internal Revenue Code Section 6700, which governs the promotion of abusive tax shelters.

The IRS claimed that RMC's captives were not real insurance companies, accusing the business of making false statements in connection with illegitimate insurance plans.

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North Carolina Captive Domicile after a Decade of Growth

North Carolina Insurance Commissioner Mike Causey recently announced that North Carolina has secured its position as the third-largest domicile for captive insurance companies in the United States, following Vermont and Utah. This comes a decade since North Carolina's Captive Insurance Act was passed.

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Captive Claim Highlight

Client Profile

Industry: Business

Specialty: Government Contractor for Training & Development

Location: Virginia

Claim Information

Description: One of our Insureds provides specialized training to foreign companies under governmental agency contracts. Due to a change in legislation, the contract was cancelled, causing our Insured to lose a valued and significant customer. Through their Captive's Actual Net Loss Insurance Policy "Loss of Key Customer" coverage, they were able to recover revenue lost from this relationship.

Line of Coverage: Loss of Key Customer

This exposure was elected for coverage by the client under their Captive Policy. This resulted in a claim payment amount of approximately $300,000.

*Please note that each claim will undergo an independent investigation and thorough review process. Various components specific to the claim at hand will be assessed thoroughly to determine if the loss is covered by the policy.

Happening This month:

5/1: May Day

5/2: National Day of Prayer

5/4: Star Wars Day

5/5: Cinco De Mayo

5/6: National Nurses Day

5/9: Ascension

5/12: Mother’s Day

5/19: Pentecost

5/20: National Rescue Dog Day

5/23: World Turtle Day

5/27: Memorial Day

5/28: National Burger Day

This Month is Observed as:

National Bike Month

National Physical Fitness and Sports

National Mental Health Awareness

Why Form a Captive?

There are numerous potential advantages to forming a captive insurance company. Captive insurance companies are formed for both economic and risk management purposes. By forming a captive insurance company, a business can dramatically lower insurance costs in comparison to premiums paid to a conventional property and casualty insurance company.

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48 South Service Road

Suite 400

Melville, NY 11747

Office: 1-833-US-CAPTIVE

(1-833-872-2784)

Fax: 1-888-929-6565