Captive Insurance Services and Solutions - WMS, LLC , Captive Insurance Planning , Captive Insurance Taxation , Captive Insurance Feasibility Studies , Captive Insurance Risk Pools , Captive Reinsurance , Captive Insurance Management , Captive Insurance Underwriting , Captive Insurance Accounting , IRS Letter Rulings, Turnkey Captive Insurance Services

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Captive Insurance Services and Solutions - WMS, LLC

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Captive Insurance Services and Programs, Captive Insurance Company

Wealth Management Solutions, LLC. (WMS) provides turnkey Captive Insurance Services and Solutions to mid sized companies and their owners that deliver huge Insurance and Tax Savings as well as big Estate Planning, Retirement, and Asset Protection Benefits! WMS helps business owners who wish to own and operate their own Captive Insurance Company for the purpose of self insuring a portion of their business risks at dramatic savings compared to traditional insurance rates. Our Captive Insurance Solutions enable our clients to lower their premiums, stabilize their rates and increases their after tax profits - all at an affordable low cost of ownership. Owning a Captive Insurance Company  also provides our clients with significant Tax Savings as well as Estate Planning, Retirement and Asset Protection Benefits!  WMS, LLC provides a complete menu of Turnkey Captive Insurance Services including   Captive Insurance Company Planning,  Captive Insurance Feasibility Studies, Captive Insurance Domicile Selection,   Captive Insurance Company Formation & Licensing,  Captive Insurance Management,   Captive Insurance Underwriting,  Captive Reinsurance, Captive Insurance Risk Pools,   Captive Insurance Company Accounting & Compliance Reporting, Captive Insurance Company Tax Planning & Preparation Services,  Captive Insurance Estate Planning,   Captive Insurance Retirement Planning,  and    Captive Insurance Asset Protection Planning.

WMS, LLC also assists clients in obtaining an IRS Letter Rulings for their Captive Insurance Company which guarantees the tax treatment their Captive Insurance Company will receive from the IRS.  An IRS Letter Ruling  virtually eliminates all tax risk associated with owning and operating a Captive Insurance Company. To learn more about Captive Insurance Tax Incentives and IRS Captive Insurance Tax Treatment Guarantees  please see Captive Insurance Tax Incentives and IRS Captive Insurance Tax Treatment Guarantees. To learn more about the benefits of owning your own Captive Insurance  Company,  request a Free Consultation with one of our knowledgeable professionals  by clicking the Free Consultation link or call us at (201)-995-9085 today.

 Captive Insurance Benefits:

  • Captive Insurance Benefits -  A Captive Insurance Company will allow you to insure risks which are difficult, impossible or uneconomical to place in the traditional insurance market.  A Captive Insurance Company will also allow you to custom tailor coverage to meet your needs and will improve the efficiency of claims payments. Owning a Captive Insurance Company will also allow you to capture both premium investment income and underwriting profits. In addition, a Captive Insurance Company will  improve your visibility and control over loss costs. By forming a Captive Insurance Company you can also access the reinsurance markets and receive lucrative Captive Reinsurance commissions and profits as well as critical risk transfer and distribution benefits. A Captive Insurance Company allows you to buy insurance from other insurance companies (reinsurance) at wholesale vs. retail rates.  In addition, the insurance premiums which your Captive Insurance Company charges your existing businesses will be calculated based on their  favorable claims histories instead of less favorable industry loss cost estimates. A Captive Insurance Company will also allow you to reduce costs by eliminating broker and agent  commissions, administrative charges, and  insurer profits which are all part of the premiums you currently pay to a traditional insurance company. In view of all the Captive Insurance benefits listed above, its no surprise that Captive Insurance industry experts estimate that almost any business that pays $350,000 or more in annual insurance premiums and has a favorable loss history can save up to 50% on its cost of business insurance with a Captive Insurance Company.

  • Low Captive Insurance Company Start Up and Operating Costs - Our Captive Insurance Companies cost less than $15,000 to create and have an annual cost of operations (excluding claims) of about 6% - 10% of  annual premiums! These costs are more than covered by the investment income your captive will generate by investing the premiums it receives.

  • No Loss of Control - You Own and Control Everything - Our Captive Insurance Programs keep you in Control of your money at all times!  You control all bank and investment accounts and you own all the stock of your Captive Insurance Company. Most of our clients simply allocate ownership and control in their Captive Insurance Company the same as they do in their existing businesses. Although all the bank accounts and investment accounts of your Captive Insurance Company must be kept separate from those of your existing businesses, you decide which US Banks and Financial Institutions will hold these accounts, and you decide who will have signature or any other authority over these accounts.  

  • Captive Insurance Companies are Flexible - A Captive Insurance Company provides substantial  insurance and tax savings that increase over time based upon the amount of premiums the Captive Insurance Company receives from its insureds. You control the amount of insurance your affiliated businesses purchase from your Captive Insurance Company each year.  In addition, there is no restriction on how long you can own and operate a Captive Insurance Company.  WMS can quickly implement a Captive Insurance Company Program for you that will allow you to save up to 50% off your current cost of insurance while also receiving tax incentives and savings worth as much as  $525,000 or more each year!  Imagine how much money you can save on insurance and taxes over the next 5, 10, 15 or 25 years by owning your own Captive Insurance Company!  Maybe that's why the biggest regret most of our clients have is that they didn't hear about us sooner!  

  • No Impact on your Consolidated Financial Statements or Debt Capacity - Our Captive Insurance Companies can be 100% owned by you or a Parent or Holding Company or their shareholders without any loss of tax benefits.  As a result, a Captive Insurance Company which is a wholly owned subsidiary of your Parent or Holding Company will have no negative effects on the Consolidated Financial Statements of your businesses. This means that a Captive Insurance Company will not impair your overall credit worthiness of debt capacity. On the contrary, owning a Captive Insurance Company will significantly improve your financial strength and cash flow by providing you with substantial insurance and tax savings.

  • Captive Insurance Tax Benefits can be Guaranteed by the IRS in Writing -  Our Captive Insurance Company Programs have been designed with input from current and former IRS Agents and Associate Chief Counsels as well as nationally prominent Tax Attorneys and CPA's in order to ensure that we fully comply with all US Tax Laws.  As a result, we will gladly act on your behalf to obtain a Private Letter Ruling from the IRS, which provides a written guarantee regarding the tax treatment your Captive Insurance Company will receive  from the IRS on its most critical tax aspects. This virtually eliminates all Tax Risks associated with owning and operating a Captive Insurance Company.

Captive Insurance Eligibility - Is a Captive Insurance Company Right for You?

In order to justify the expense of owning and operating a Captive Insurance Company you should be prepared to pay a minimum of $350,000 per year in premiums to your Captive Insurance Company to insure at least 3 or more businesses which you own or control. Each business you insure with your Captive Insurance Company  must have employees, and/or assets, revenues and profits in order to be insured. The businesses you insure with your Captive Insurance Company can be any legal form including a Partnership (all types), a Corporation (regular and Sub-S), a Professional Corporation, a Limited Liability Companies (with 2 or more members), or a Trust  (all non-grantor trusts).  Finally, Captive Insurance Companies are legally required to maintain at least $100,000 in Capital at all times. You must therefore be able to Capitalize your Captive Insurance Company with an initial Capital Contribution of $100,000.

There are no other eligibility restrictions on the type of businesses you can own or insure with your Captive Insurance Company.  In addition, there are no eligibility restrictions regarding the location, annual sales, or number of employees of your businesses. The one thing all of our Captive Insurance Company clients do have in common is a desire to reduce their insurance costs while also increasing their coverage. Our Captive Insurance Company clients also appreciate the ancillary tax benefits and incentives which result from owning a Captive Insurance Company.  

The typical WMS Captive Insurance Company client owns 6 or more privately held businesses which collectively have over 100 employees, over $15 million in Total Assets, over $25 million in annual Revenues,  and over $1.5 million in pre-tax profits.  All of our Captive Insurance clients have business locations inside the United States and a significant number also have businesses locations or operations in foreign countries. Our Captive Insurance clients operate their businesses as corporations, limited liability companies (2 or more members), partnerships, limited partnerships, limited liability partnerships, and several other popular business forms and have made elections to pay taxes as  sub-S corporations, partnerships, corporations,  sole proprietorships or taxable trusts. WMS and its associates have successfully created a number of Captive Insurance Companies for a wide range of business and their owners. At WMS we recognize that no two businesses are alike. That's why we custom tailor every Captive Insurance Company to meet the unique needs of each client.  Regardless, of the type and number of businesses you own, where they are located, or how you own them (i.e., as a stockholder, partner, member, trustee, etc.) WMS can custom tailor a Captive Insurance Company Program that meets all your needs. To learn more about the benefits of owning your own Captive Insurance  Company,  request a Free Consultation with one of our knowledgeable professionals  by clicking the Free Consultation link or call us at (201)-995-9085  today.

WMS  Captive Insurance Services

WMS Provides a Full Menu of Turnkey Captive Insurance Services

WMS provides a complete menu of turnkey Captive Insurance Company services from identifying the business risks your Captive Insurance Company can insure to performing a comprehensive Captive Insurance Company Feasibility Study, Incorporating and Licensing your Captive Insurance Company in the Domicile which best meets your needs, Operating and Managing your Captive Insurance Company, performing all Captive Insurance Company Accounting, Underwriting, Regulatory and Tax Reporting and Compliance, etc. WMS provides one point of contact for all your Captive Insurance needs. This allows us to provide you  a consistently high quality of service at the lowest possible cost, with no finger pointing!  Please see a detailed list of our complete menu of Captive Insurance Company Services below.

Step #1 - Captive Insurance Client Consultation

During an initial telephone consultation we can usually determine if a Captive Insurance Company makes sense for your business. The initial consultation takes around 15 minutes and is free of charge. The initial telephone consultation can be between WMS and the business owner(s) or their designated representatives.

Step #2 - Captive Insurance Risk Analysis

WMS will analyze your current risk exposures and existing coverages in order to identify risks which are currently uninsured, uninsurable, under insured, or uneconomical to insure with traditional insurers. These risks are ideal candidates for insurance by a Captive Insurance Company.      Learn more

Step #3 - Captive Insurance Company Feasibility Study

The first step to owning your own Captive Insurance Company, begins with a a Captive Insurance Company Feasibility Study from WMS. Each Captive Insurance Company Feasibility Study  we performs is custom tailored to meet our client's individual needs. Your customized Captive Insurance Company Feasibility Study will include:

  • Documentation of Your Captive Insurance Company's Business Purpose

  • Selection of a Domicile where Your Captive Insurance Company will be Incorporated, Licensed, Operated and Managed.

  • Selection of a specific Structure for your Captive Insurance Company (i.e. Pure or Single Parent, Group, Association, etc.)

  • Documentation of the best ownership structure for your Captive Insurance Company,

  • Documentation of the best Capitalization level for your Captive Insurance Company,

  • Identification of the Insurance Coverages and Limits your Captive Insurance Company will provide including Premium estimates.  Please see Commercial Coverages your Captive Insurance Company can Insure.

  • Identification of the Reinsurance Lines, Limits, Policy Forms, Rates, Rules Treaties, Reinsurers, and Reinsurance Pools your Captive Insurance Company will use

  • Identification of the Reinsurance your Captive Insurance Company will require by line and limit in order to satisfy IRS Captive Insurance Tax Safe Harbor Rulings.

  •  Identification of the actual Reinsurance Coverages , Limits, Rates, Treaties, and Reinsurance Pools your Captive Insurance Company will use to meet its Reinsurance requirements

  • A Multi-Year Captive Insurance Company Costs/Benefit Analysis (over a 1,5,10,15 & 25 year time frame)

  • 5 Years of  Pro Forma Financial Statements for your Captive Insurance Company,

  • An Analysis of Captive Insurance Company Tax Consequences       Learn more

Step #4 - Captive Insurance Company Creation and Licensing

  • Retain Registered Agent/Office for the Captive Insurance Company in the selected Domicile

  • Incorporate, Organize, and Register the newly created Captive Insurance Company in domicile

  • File Form SS-4 and obtain a Federal Employer ID # for the Captive Insurance Company

  • File IRC Section 953(d) election to have the Captive Insurance Company taxed as a domestic US Corporation (Only if the domicile is a foreign country)

  • Set Up New Bank and Investment Accounts for the Captive Insurance Company

  • Capitalize the newly formed Captive Insurance Company

  • Prepare & File the Captive Insurance Company's Insurance License Application with the Insurance Regulators in Domicile

  • Pay all Registration, Application, Licensing, Annual Report and other Regulatory Fees for the Captive Insurance Company

Step #5 - Captive Insurance Company Operations and Management

  • Provide all Underwriting required by the Captive Insurance Company including all Policy Forms, Rates, Premium Calculations, Rules and Loss Costs

  • Verify the Captive Insurance Company's Premium Pricing with Third Party Underwriters and/or Actuaries

  • Provide all Captive Insurance Company Policy Issuance, Renewal, Cancellation and Administration in Domicile

  • Perform all Captive Insurance Company Premium Invoicing, Collection and Deposits

  • Accept all contracts on behalf of  the Captive Insurance Company in the Domicile

  • Pay all Loss Claims on behalf of Captive

  • Contract with and Compensate All Third Party Consultants and Service Providers

  • Arrange all Third Party Reinsurance required to satisfy the insurance and tax needs of the Captive Insurance Company Please see our ( WMS Captive Reinsurance Services) for more details.

  • Maintain the Captive Insurance Company's corporate books and records and perform all required corporate house keeping in domicile

  • Perform all Captive Insurance Company Accounting including the preparation of periodic Captive Insurance Company Financial Statements and Cession Reports

  • Document and Monitor the Captive Insurance Company's Loan Activity, etc.

  • Prepare and File all Regulatory Reports including the Captive Insurance Company's NAIC Annual Statement (Short Form)

  • Payment of  all Regulatory Fees on behalf of the Captive Insurance Company

  • Perform Periodic Domicile Solvency Margin & Capitalization Analysis for the Captive Insurance Company

  • Perform Periodic Loss Reserve Analysis for the Captive Insurance Company

  • Coordinate the Captive Insurance Company's Annual Audit by an Auditor who is approved by the  Insurance Regulators of the Domicile (Only if Annual Audit is required)

  • Assist CPA Firm in the Preparation of the Captive Insurance Company Annual Form 1120-PC Tax Return

  • Perform ongoing Interface with the Insurance Regulators in Domicile and US Tax Authorities

  • Monitor and Respond to Legislation and Regulatory Pronouncements

  • Monitor and Implement Options that Optimize the benefits of the Captive Insurance Company  to its Shareholders

  • Captive Insurance Company Shut Down and Wind Up Activities (If and when required)

Additional WMS Captive Insurance Services

WMS is happy to act on your behalf to obtain a Private Letter Ruling or Determination Letter from the IRS which guarantees in writing the tax treatment your Captive Insurance Company will receive from the IRS. Since the tax treatment the IRS accords your Captive Insurance Company is critical, we recommend that all Captive Insurance Company obtain a Private Letter Ruling or Determination Letter from the IRS.        Learn more

WMS Captive Reinsurance Pools

Captive Reinsurance is a critical part of any well structured Captive Insurance Program. Without the proper amount and type of reinsurance, your Captive Insurance Company  will not be able to achieve the degree of risk shifting and risk distribution which are required in order to realize important insurance and tax benefits. These insurance and tax benefits will play a critical role in determining your Captive Insurance Company's future success or failure. That's why WMS incorporates the appropriate amount of Reinsurance in virtually every Captive Insurance Company it creates. We will also assist you in designing and implementing a Captive Reinsurance Program  that meets your needs at an affordable low price.       Learn more

Captive Insurance Tax Planning

The tax  benefits of a properly structured Captive Insurance Company can be considerable! For example, a properly structured Captive insurance Program will allow your existing businesses to deduct 100% of the premiums they pay to your Captive Insurance Company while allowing your Captive Insurance Company to receive up to $1.2 million in premiums each year Tax Free!  This reduces your  Federal and State Taxable Income by the amount of your annual premium deductions, up to $1.2 million a year!  In order to ensure that your Captive Insurance Company receives every penny of these lucrative tax benefits, WMS structures every Captive Insurance Company it creates to comply with IRS Captive Insurance Tax Safe Harbor Rulings and Guidelines which govern the definition and taxation of insurance and insurance companies.       Learn more

Captive Insurance Company  Start Up and Operating Costs   

Captive Start-Up Costs Breakdown Fee
  Captive Feasibility Study w Multi-Year Cost/Benefit Analysis, etc.  $     4,995
  Development of Insurance and Reinsurance Forms, Rules and Rates  $     3,750
  File all Applications and Business Plans for Captive Incorporation and Licensing  $     3,750
  Domicile Fees for Captive Incorporation and Issuance of an Insurance License  $     4,115
  Misc. out of pocket expenses  $        385
  File Form SS-4  and obtain a Federal EIN for Captive  $          25
  Open a Bank Account for the Captive in a state where you conduct no business now  $          30
  Establish an US Office for Captive in a state where you conduct no business now  $        250
  File the 953 (d) Election for the Captive  $        195
  Less:  Promotional Incentives and Group Discounts  $    (2,500)
Sub Total       $    14,995
   
Ongoing Operation Costs (excluding reinsurance and claims) Fee
  Annual Insurance License Renewal

 $     1,500
  Annual Corporate Registration Renewal  $        500

  Annual Captive Management

  $   12,000
      Provide Registered Agent/Office in Domicile

included
      Prepare Annual Financial Statements

included
      Prepare NAIC Annual Statement

included
      Prepare & File Required Reports & Certifications with Insurance Regulators

included
  Prepare annual Form 1120-PC tax return with CPA review

 $       995
  Annual CPA Audit of Captive's Financial Statements 1  negotiable 
 
Sub Total       $    14,995
   
Initial Capitalization of Captive (in an US Bank Account)

 $  100,000

   
Annual Reinsurance and Claims Costs %
  Stop Loss & Other Reinsurance. as a % of  Written Premiums 2 5.5% - 8.0%
  Loss Claims Expense as a % of  Written Premiums 3 See note
   

Request a PLR (Private Letter Ruling) for the Captive from the IRS pursuant to Rev. Proc. 2002-75 which affirms in writing that the IRS will treat  the Captive as an insurance company pursuant to IRC section 831 and that all premium payments  will be deductible as business expenses per IRC section 162. 4

  $     25,000

1 Some insurance domiciles waive the annual requirement to have the Captives Financial Statements audited by a CPA Firm. In such cases, the annual Audit fee would be zero. Otherwise, an annual audit should cost between $1,500 and $5,000.

2  In order to satisfy IRS Safe Harbor Rules governing the Taxation of Captive Insurance Companies, virtually every Captive will require at least some amount of Reinsurance. A Captive Insurance Company with annual written premiums of $1,000,000 or more should realistically expect annual Reinsurance Fees and Expenses to be 5.5% to 8.0% of its annual written premiums.          (WMS Reinsurance Pools and Services)

3  The Loss Claims Expense of the Captive will approximate your related risk loss % over time since you will be participating in a reinsurance pool class where all insureds of a particular Class have substantially similar historical loss ratios. Note, your actual annual related risk and unrelated risk loss cost ratios will be different, however, over the long- term, the average loss cost ratios of the related and unrelated risks which are insured by the captive should be approximately the same.

4  This fee represents the cost of having WMS draft and submit the PLR request on behalf of the captive. It also includes the payment of a $10,000  User Fee to the IRS for reviewing and issuing a PLR.     (Learn more)                            http://www.build-reciprocal-links.com/

Get a  Free Consultation

In order to schedule a Free Consultation you must fill out and submit the Form shown below. Please provide us with your contact information for all (*) fields below and we will promptly respond to your information request.  All information you provide is confidential and WMS does not  share, sell or disclose any information you provide to any other parties.  

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