CAPTIVE INSURANCE PRACTICE GROUP
CAPTIVE INSURANCE
AN OVERVIEW As business risks continue to grow more complex, more quickly, many insurers’ traditional products cannot accurately, predictably and fully meet an organization’s needs. That’s where alternative approaches in risk financing and risk management can play a critical role. Honigman’s Captive Insurance Practice Group helps captive insurance companies and risk retention groups, as well as their owners and insureds, identify, manage and address the full array of legal and tax issues arising from the formation, implementation and use of captive insurance companies, risk retention groups and their insurance programs.
Our Experience Since 1975, Honigman has advised businesses, tax-exempt organizations and governmental entities on the innovative use of captives and other alternatives to commercial insurance and traditional risk financing. Today we counsel hundreds of clients, including single-owner captives, group captives and cell captives, operating or domiciled in the leading offshore jurisdictions (such as Bermuda and the Cayman Islands) and U.S. states (such as Vermont and South Carolina), on the full spectrum of domestic and international issues that arise in their formation, operation and governance. Nearly a dozen attorneys in our firm’s insurance department concentrate their practices on this area, including two who focus exclusively on the complex tax issues involving insurance company taxation and international transactions. We work closely with insurance brokers, actuaries and captive managers to provide interdisciplinary, practical solutions and services. Coupled with our lawyers’ deep understanding of traditional insurance products and markets, we can offer effective insights into the advantages, disadvantages and legal implications of captive insurance options. We help clients determine the most effective programs and develop innovative strategies that respond directly to their specific risk-financing and risk-management needs.
Our Services We counsel clients on issues that arise at every step, including: Planning and Development • Identification and refinement of captive program objectives • Selection of domicile • Evaluation of program vehicle options • Assessment of state insurance regulations, as well as applicable state and federal laws (including fraud and abuse, Stark and other laws affecting healthcare providers) • Review of insurance requirements in contracts and financing arrangements
CAPTIVE INSURANCE
Our Services (continued) Formation • Determining corporate structure of the captive • Obtaining insurance licensure • Development of funding strategies • Development of insurance program and corporate documents Initial and Ongoing Operations • Participation in board and shareholders meetings, as well as board education and orientation • Preparation and review of minutes • Review of contracts and insurance program documents • Development of corporate policies • Conducting strategic planning and enterprise risk reviews • Analysis of existing structural models to address changing business requirements and environments Tax Matters • Design and implementation of tax-efficient U.S. inbound and outbound structures • Compliance with U.S. state and federal tax-filing requirements affecting multi jurisdictional insurance arrangements • Tax-form preparation • Implications of U.S. and foreign tax laws on cross-border transactions (including tax treaties, withholding taxes, Subpart F/anti-deferral rules and foreign tax credits) • Deductibility and taxation of insurance premiums • Representation in Internal Revenue Service audits Coverage and Insurance Disputes • Drafting and interpreting insurance policy language • Analyzing coverage and preparing reservation of rights letters and claims denials • Advising on complex insurance claims, reinsurance issues and bad faith exposures • Representing captive insurance companies in mediations, arbitration and litigation
Our Philosophy Our holistic service approach enables us to quickly identify and focus on those issues of most import to our clients, develop and coordinate solutions across legal disciplines, and provide streamlined, cost-effective counsel to captives, owners and insureds.
INSURANCE DEPARTMENT JULIE E. ROBERTSON 313.465.7520 | jrobertson@honigman.com