Telephone: (+350) 200 42686
Innovative and impartial international tax planning, company, trust and pensions services in Gibraltar for private clients, their businesses and their families.
Captive Insurance Companies
Many large corporations set up their own captive insurance company, which is owned by the group and insures only its own group’s risks.
Captives are often set up in low tax jurisdictions such as Gibraltar.
The benefits to you of setting up a captive can include:
Saving money: the premiums charged by traditional insurance companies are loaded to account for expenses and profit. By paying a premium into your own insurance company, your corporation should save on the insurer’s profit.
Access to reinsurance markets: corporations normally have to buy insurance through a primary insurer. By setting up a captive, you may be able to purchase protection more cheaply through the reinsurance markets.
Insure a wider range of risks: for some types of risk, insurance cover may be prohibitive, or simply not available, from traditional insurers. A captive allows you to self-insure at a reasonable price.
Tax deduction: premiums paid by a company to an insurer are usually tax deductible. Insurance premiums can therefore be used to reduce your parent company’s tax bill.
Consolidation of profits: if there are no claims, any profits earned by the captive are consolidated into the group.
Protected cell companies
The solvency requirements for a captive insurance company are the same as for a normal insurer underwriting third party risks.
Consequently, the captive solution is often only available to larger corporations.
However, smaller captives can be set up as a cell within a Protected Cell Company, where the promoters would have to put up less capital.
To discuss how we can help you, please email us or telephone us on Gibraltar (+350) 200 42686 and ask for Frank Willis.
