Mid-Market

Captive insurance is a form of insurance whereby a company owns its own insurance company and pools the insurance risk with other businesses. Critically, the majority of the risk is spread across companies in industries outside of the mid-market.

A captive insurance company provides several advantages and addresses several pain points for you and your business.

INSURANCE BENEFITS

  • Tailored Coverages
Captive insurance allows businesses to tailor their coverages to meet their unique needs. You can choose the type and level of coverage that best suits your business, rather than being limited to the options provided by traditional insurance providers.
  • New Coverages
3F can work with you to create n ew coverages, for example, additional crop insurance above the government subsidize amounts in a cost effective manner.
  • Risk Management
By establishing your own insurance company, businesses have a greater incentive to identify and mitigate risks proactively. By being a responsible operator, you benefit even m ore because you retain your premiums net of losses (captive and pool).

ECONOMIC BENEFITS

1. Premium Retention: You keep the premiums you pay into the captive net of claims and losses (captive and reinsurance pool). You also retain the underwriting gains on the premiums paid into your captive.

2. Favorable Tax Treatment: Captives have favorable tax characteristics, especially when operating in
states with high tax rates:

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Your Company

Captive Insurance

  • Tax Rate Today (Federal and CA)
  • Tax Rate on Investments
  • PV Tax Rate (after 10 years)
  • 50%
  • 33 - 50%
  • 50%
  • 0%
  • 21%
  • 10%

Present Value (PV) tax rate assumes a 7% discount rate

FINANCING BENEFITS

Your captive insurance company can make loans to your business up to 45% of the captive’s liquid assets. The parent company can use these funds for various purposes, such as working capital, acquisitions, capital expenditures, or debt refinancing.

You Control the Financing

By lending from your captive insurance company, you take control over your financing options.

You Control the Financing

You access funds on your terms, without dealing with external lenders.

Tax Benefits

The interest payments are income for your captive insurance while being a tax deduction for your operating business.

Tax Benefits

Your captive will most likely pay a lower tax rate, providing you with meaningful overall tax savings.

Risk Management and Financing Integration

Lending from your captive insurance company allows your parent company to integrate its risk management

Risk Management and Financing Integration

Risk management and financing strategies. You have control of both.

Implementation and Management

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Setting up a captive insurance company can seem daunting, but with 3F Captive Services, it’s a smooth and guided process. We handle and arrange for setup, management, and compliance complexities, allowing you, the business owner, to focus on what you do best — running your business.

Ready to Take Control of Your Business Insurance?

Choosing Captive insurance is a strategic decision that can enhance the success and stability of your business. With 3F Captive Services, you’re choosing a partner who understands the needs of small to medium-sized businesses and is committed to providing solutions that fit you.

Contact Us Today

Ready to explore how Captive insurance can benefit your small business? Contact us for a consultation, and let’s start the journey towards more intelligent, efficient insurance management.
Contact Us Today - (775) 473-1956
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