A captive domicile is the location where a captive insurance company is formed and regulated. Captives are bona fide insurance companies, formed to insure the risks of an affiliated business. Business owners who form a captive to insure their risks must choose a captive domicile, either onshore or offshore, to ensure the captive is operating as a true insurance company.
In general, insurance in the United States is regulated at the state level—more states are adopting captives and passing captive legislation now more than ever. A captive domicile with a good regulatory framework is integral to clients’ success in alternative risk planning. Domicile consulting should be a mainstay of a captive insurance program, as part of a multidisciplinary approach to the planning.
Similarly, the domicile should be experienced in regulating all captive insurance types including single-owner captives, group captives, and agency captives. The video below explains.
Have questions? Call Capstone at 713.800.0550, or submit your information via the form. One of our experts will be in touch. As part of our captive domicile consulting service, we’ll discuss how we can help you or your client select the most appropriate jurisdiction.
Choosing The Most Appropriate Captive Domiciles
Capstone prefers to work with domiciles that have established track records on regulatory issues and have a history of consistent rulings. Some states’ push captive insurance as a ‘for profit’ extension of its regulatory function. For example, Vermont has a gross receipts tax on premiums and compels captive owners to hire local professionals who then extract high fees for services. Vermont also requires an annual on-site meeting, which adds to the cost.
Since the founding of the Lloyd’s of London insurance marketplace in 1688, England has been among the most influential reinsurance markets in the world along with Bermuda and other UK overseas territories. These jurisdictions, including Anguilla which specializes in 831(b) captives, continue to set the standard for captive regulation.
Captive insurance domiciles such as Anguilla and Delaware provide the necessary oversight to ensure compliance, but also offer flexibility so captive owners can insure their risks comprehensively. A captive domicile should have a healthy business environment and shouldn’t need to rely on ulterior motives to attract new captives.
Capstone’s Approach to Captive Domicile Selection
Capstone Associated Services, Ltd. is one of the oldest and largest sponsors of captive insurance companies, which underwrite property & casualty for mid-market businesses.
Capstone provides the most comprehensive, captive insurance planning available. Capstone's staff includes CPCUs (Chartered Property & Casualty Underwriters), insurance experts, accountants and administrators.
It is a captive management services provider, offering domicile consulting, insurance underwriting and claims services, captive asset management, and accounting for one turnkey fee.
Having formed over 200 captives in multiple domiciles over the past 26 years, we understand the importance of choosing the right captive domicile, whether it is in the U.S. or abroad.
The domicile of choice for your captive depends on many factors. At Capstone, we know what to look for so you can take advantage of many captive insurance benefits. The objective is to fit the client’s needs with the most appropriate domicile.
We’re happy to discuss the most appropriate captive domicile for your insurance company. Contact us today for a free consultation.
