This sounds too good to be true. Why isn’t everyone doing this?
Many candidates are unaware of micro captive opportunities. In addition, those that may be aware do not always meet the fundamental financial criteria in terms of taxable income and insurable risk necessary to make a micro captive program feasible.
Commercial insurance, workers’ compensation, general liability and property are relatively inexpensive. Why would I want to insure through a captive?
Traditional commercial insurance is currently competitively priced. However, the captive typically insures risk that businesses face that are cost prohibitive or not commercially available (i.e. – coverage of deductibles, commercial exclusions, environmental, cyber security, pollution, credit default, subcontractor default, disability, legal defense reimbursement and intellectual property).
What are the Capitalization Requirements for the Captive?
All jurisdictions differ slightly. The State of Missouri requires an initial capital reserve of $250,000.
How do we Price Premiums?
We use market quotes from independent carriers and ISO Rates, and then work with an independent third-party actuary to confirm the appropriate market price for premiums.
I am interested in knowing if a captive makes economic sense given my personal and business situation – what are the next steps?
- Metzler Captive Solutions will request three years of financial statements, tax returns and summaries of your existing insurance policies (including claims history). We will enter into a standard confidentiality agreement to protect this information. Our team of professionals will conduct an initial review the information and advise you if a captive is right for you for no charge.
- If the parties agree to push forward, Metzler Captive Solutions will then conduct a formal risk audit and feasibility study in partnership with an independent third-party actuary.
What are the Costs for your services?
- Standard Implementation costs – $90,000, subject to domicile jurisdiction
- Annual Costs – $70,000, subject to domicile jurisdiction