Current All Jobs

Current All Jobs

Current All Jobs

Over the past 20 years, many small businesses have begun to insure their own risks through a product called "Captive Insurance." Small captives (also known as single-parent captives) are insurance companies established by the owners of closely held businesses looking to insure risks that are either too costly or too difficult to insure through the traditional insurance marketplace. Brad Barros, an expert in the field of captive insurance, explains how "all captives are treated as corporations and must be managed in a method consistent with rules established with both the IRS and the appropriate insurance regulator."

Gujarat Rozgaar Samachar  Click here


Oil Indian Recruitment 2021: Vacancies for Various 535 Posts

Computer Master book is Most useful In all competative exam so its download and read this book


Gujarat Police Recruitment for Valuer Posts 2021

Gujarat Police Recruitment for Valuer Posts 2021

Posts Name: Valuer

Educational Qualification, How to Apply & Other Details: Please Read Official Advertisement.

Last Date: Within 10 Days from the Date of Advertisement Published
(Advertisement Published Date: 22-08-2021)

Ahmedabad Bank Bharti ADC
ADC Bank Recruitment For Various Post 2021 

Akola DCC Bank Recruitment 2021 Apply Online Now For 100 Posts 

 ગજરાત પોલીસ કોન્સ્ટેબલ ના જૂના પેપર્સ ડાઉનલોડ કરો..👇

Click here

Advertisement: Click Here

Uttam Dairy Ahmedabad Requirement 2021 Click here

💥 GISFS Recruitment for 2000 Security Guard Posts 2021 (OJAS)  Click here

Employment Office Aravalli Recruitment 2021 click here  જિલ્લા રોજગાર કચેરી અરવલ્લી કરિયર કાઉન્સેલરની જગ્યા માટે ભરતી.  click here 

Gujarat State Forest Development Ltd (GSFDCL) Recruitment for Various Posts 2021 Click here 

KSKV Kachchh University Recruitment 2021 Apply for Teaching Assistant Posts  Click here

SSC GD Recruitment for 25271 Police Click here

Ahmedabad Traffic Trust Recruitment for Varous 700 Traffic Brigade Posts 2021 Click here

GSECL Recruitment for Vidyut Sahayak, Junior Programmer & Other Posts 2021 click here

PGVCL Vidhyut Sahayak Recruitment 2021|Apply Online Junior Engineer (Electrical) 49 Vacancy Click here

UPSC Combined Defence Services Examination (II) Notification 2021 Click here

Union Bank of India Recruitment 2021,  Click here

Industrial Development Bank of India - IDBI Bank Recruitment for 650  Assistant Manager Grade A Posts 2021 Click here

Industrial Development Bank of India(IDBI)Recruitment Posts 2021 Click here

State Bank of India (SBI) Recruitment for Various 68 Specialist Cadre Officers Posts 2021 Click here

Indian Space Research Organization (ISRO), Ahmedabad Recruitment 2021 Click here

MSU Baroda Teaching Non Teaching Posts Recruitment 2021        Click here

High Court of Gujarat Recruitment for 21 System Assistant & System Officer Posts 2021 (HC OJAS) Click here

GSTES Recruitment  2021 Click here

Amod Nagarpalika Click here

HNGU Recruitment for self Finance colleges Click here

Nadiyad  Nagarplika Click here

Ghodra Nagarpalika Click here

Chota Udepur Nagarpalika Click here

Lunavada Nagarpalika Click here

Keshod Nagarpalika Click here

Valsad Nagarpalika Click here

 According to Barros, often single parent captives are owned by a trust, partnership or other structure established by the premium payer or his family. When properly designed and administered, a business can make tax-deductible premium payments to their related-party insurance company. Depending on circumstances, underwriting profits, if any, can be paid out to the owners as dividends, and profits from liquidation of the company may be taxed at capital gains.

વિદેશમાં જોબ ઇચ્છુક માટે મહત્વ ની જાણકારી

*🇱🇷 લટેસ્ટ U.S જોબ માહિતી  2021*

🇦🇺 *લેટેસ્ટ ઑસ્ટ્રેલિયા જોબ માહિતી  2021*

🇬🇪 *લેટેસ્ટ U.K જોબ માહિતી  2021*

🇹🇩 *લેટેસ્ટ જર્મની જોબ માહિતી  2021*

🇧🇷 *લેટેસ્ટ બ્રાઝિલ જોબ માહિતી  2021*

More Jobs : Click here 

જોઈન whatsapp અને ટેલીગ્રામ

whatsapp click here

ટેલીગ્રામ click here

Premium payers and their captives may garner tax benefits only when the captive operates as a real insurance company. Alternatively, advisers and business owners who use captives as estate planning tools, asset protection vehicles, tax deferral or other benefits not related to the true business purpose of an insurance company may face grave regulatory and tax consequences.

Many captive insurance companies are often formed by US businesses in jurisdictions outside of the United States. The reason for this is that foreign jurisdictions offer lower costs and greater flexibility than their US counterparts. As a rule, US businesses can use foreign-based insurance companies so long as the jurisdiction meets the insurance regulatory standards required by the Internal Revenue Service (IRS).

There are several notable foreign jurisdictions whose insurance regulations are recognized as safe and effective. These include Bermuda and St. Lucia. Bermuda, while more expensive than other jurisdictions, is home to many of the largest insurance companies in the world. St. Lucia, a more reasonably priced location for smaller captives, is noteworthy for statutes that are both progressive and compliant. St. Lucia is also acclaimed for recently passing "Incorporated Cell" legislation, modeled after similar statutes in Washington, DC.

Common Captive Insurance Abuses; While captives remain highly beneficial to many businesses, some industry professionals have begun to improperly market and misuse these structures for purposes other than those intended by Congress. The abuses include the following:

1. Improper risk shifting and risk distribution, aka "Bogus Risk Pools"

2. High deductibles in captive-pooled arrangements; Re insuring captives through private placement variable life insurance schemes

3. Improper marketing

4. Inappropriate life insurance integration

Meeting the high standards imposed by the IRS and local insurance regulators can be a complex and expensive proposition and should only be done with the assistance of competent and experienced counsel. The ramifications of failing to be an insurance company can be devastating and may include the following penalties:

1. Loss of all deductions on premiums received by the insurance company

2. Loss of all deductions from the premium payer

3. Forced distribution or liquidation of all assets from the insurance company effectuating additional taxes for capital gains or dividends

4. Potential adverse tax treatment as a Controlled Foreign Corporation

5. Potential adverse tax treatment as a Personal Foreign Holding Company (PFHC)

6. Potential regulatory penalties imposed by the insuring jurisdiction

7. Potential penalties and interest imposed by the IRS.

All in all, the tax consequences may be greater than 100% of the premiums paid to the captive. In addition, attorneys, CPA's wealth advisors and their clients may be treated as tax shelter promoters by the IRS, causing fines as great as $100,000 or more per transaction.

Clearly, establishing a captive insurance company is not something that should be taken lightly. It is critical that businesses seeking to establish a captive work with competent attorneys and accountants who have the requisite knowledge and experience necessary to avoid the pitfalls associated with abusive or poorly designed insurance structures. A general rule of thumb is that a captive insurance product should have a legal opinion covering the essential elements of the program. It is well recognized that the opinion should be provided by an independent, regional or national law firm.

Risk Shifting and Risk Distribution Abuses; Two key elements of insurance are those of shifting risk from the insured party to others (risk shifting) and subsequently allocating risk amongst a large pool of insured's (risk distribution). After many years of litigation, in 2005 the IRS released a Revenue Ruling (2005-40) describing the essential elements required in order to meet risk shifting and distribution requirements.

For those who are self-insured, the use of the captive structure approved in Rev. Ruling 2005-40 has two advantages. First, the parent does not have to share risks with any other parties. In Ruling 2005-40, the IRS announced that the risks can be shared within the same economic family as long as the separate subsidiary companies ( a minimum of 7 are required) are formed for non-tax business reasons, and that the separateness of these subsidiaries also has a business reason. Furthermore, "risk distribution" is afforded so long as no insured subsidiary has provided more than 15% or less than 5% of the premiums held by the captive. Second, the special provisions of insurance law allowing captives to take a current deduction for an estimate of future losses, and in some circumstances shelter the income earned on the investment of the reserves, reduces the cash flow needed to fund future claims from about 25% to nearly 50%. In other words, a well-designed captive that meets the requirements of 2005-40 can bring about a cost savings of 25% or more.

While some businesses can meet the requirements of 2005-40 within their own pool of related entities, most privately held companies cannot. Therefore, it is common for captives to purchase "third party risk" from other insurance companies, often spending 4% to 8% per year on the amount of coverage necessary to meet the IRS requirements.

One of the essential elements of the purchased risk is that there is a reasonable likelihood of loss. Because of this exposure, some promoters have attempted to circumvent the intention of Revenue Ruling 2005-40 by directing their clients into "bogus risk pools." In this somewhat common scenario, an attorney or other promoter will have 10 or more of their clients' captives enter into a collective risk-sharing agreement. Included in the agreement is a written or unwritten agreement not to make claims on the pool. The clients like this arrangement because they get all of the tax benefits of owning a captive insurance company without the risk associated with insurance. Unfortunately for these businesses, the IRS views these types of arrangements as something other than insurance.

Risk sharing agreements such as these are considered without merit and should be avoided at all costs. They amount to nothing more than a glorified pretax savings account. If it can be shown that a risk pool is bogus, the protective tax status of the captive can be denied and the severe tax ramifications described above will be enforced

Post a Comment

Previous Post Next Post