1. Potential Tax Benefits of an Insurance Affiliate
29 page handout
- Acceleration of risk funding deductions
- Premium deductibility & insurance treatment
- Unrelated business theory – business required
- Brother/sister risk – structures and risks
- Evaluation of IRS vs. case law definitions
- Mix of shareholders/insured’s
- Group captives and risk shifting
Charles J. Lavelle, Greenebaum Doll & McDonald PLLC, Louisville, KY
2. Review of Business Reasons for Utilizing an Insurance Affiliate
A 35-page handout
- Captive trends
- Defining captives
- Captive domiciles
- Captive structures
- Taxation of captives
- Business reasons for captive formation
Arthur Koritzinsky, Marsh USA, Inc., New York |
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3. Onshore Captive Tax and Regulatory Considerations
22 page handout
- Domicile selection factors
- State law regulatory law
- Onshore vs. offshore federal tax considerations
- U.S. taxation of onshore captives
- Computation of taxable income
- Computation of deductible loss reserves
- Recent IRS proposed regulations
- Unofficial IRS captive audit considerations
Tom Jones, McDermott Will & Emery, Chicago, IL
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9. Redomestication of Captive Arrangement
38 page handout
- Business of reasons for redomesticaton
- Alternative structures for redomestication
- Tax and regulatory issues arising from various structures
P. Bruce Wright, Esq., Dewey & LeBoeuf LLP, New York, NY
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4. Offshore Captive Tax and Regulatory Considerations
31 page handout
- Benefits of using an offshore captive
- Direct U.S. taxation of offshore captives
- Election to be taxed as a domestic corporation – IRC section 953 (d)
- Controlled foreign corporations
- Passive foreign investment (“PFIC”) rules
- Federal excise tax
Charles J. Lavelle, Greenebaum Doll & McDonald PLLC, Louisville, KY |
10. FIN 48
19 page handout
- Overview
- Scope
- Initial Recognition
- Measurement
- Interests and penalties
- Subsequent recognition, derecognition and change in judgment
- Tax planning strategies
Thomas M. Jones, McDermott, Will & Emery, Chicago, IL
Gary Bowers, Johnson Lambert & Co, LLP, Raleigh, NC |
5. Finding Third Party Risk: Internal & External
38 page handout
- The captive should be organized for a non-tax business reason(s)
- The captive should be operated as an insurance company
- The captive must share risk
Charles J. Lavelle, Greenebaum Doll & McDonald PLLC, Louisville, KY
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11. State Taxation of Captives
44 page handout
- Reasons to redomesticate
- Types of operations
- Tax issues
- Structure alternatives
- General business issues
- Regulatory issues
- Corporate issues
- Group captives
- Outbound transfers
P. Bruce Wright, Esq., Dewey & LeBoeuf LLP, New York, NY
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6. Employee Benefits as Third Party Risk
47 page handout
- Background
- Federal income tax
- State regulatory issues relating to placement
- ERISA issues
- Regulatory issues relating to the captive insurer
- Expedited exemption procedure
- Alternative structures
P. Bruce Wright, Esq., Dewey & LeBoeuf LLP, New York, NY
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12. Case Study – Principles of Corporate Finance & Non-Tax Analysis of a Major Multinational’s Captive
54 page handout
- Enterprise risk management framework
- Captive feasibility
- Captive implementation
- Results to date
- Additional benefits to be achieved
- Lessons learned
Judith Comp, Concentra Inc, Addison, TX |
7. Repatriation of Captive Profits
18 page handout
- Dividends to U.S. owners (stock and policyholder)
- Loan backs to U.S./foreign persons
- Pledge of captive assets/shares by U.S. parent
- Captive guaranty of U.S. parent debt
- Reduction of future premiums
- Other approaches
- Special consideration for U.S. tax-exempt owners
Tom Jones, McDermott Will & Emery, Chicago, IL
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13. Basics of Captive Tax Compliance
A 14-page handout
- Required and optional federal tax filings for offshore captives
- Insurance company federal tax filings for domestic captives
- Dealing with an IRS captive audit at the field or appeals office levels
Gary Bowers, Johnson Lambert & Co., LLP, Raleigh, NC
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8. Overview of Cell and Rent-a-Captives
A 29-page handout
- Cell company structure
- Federal taxation and legal aspects of “cell” companies and rent-a-captives
- Offshore and onshore cell captive world
- Varied uses of cell captives
- Segregated account
- Corollary tax ramifications
Tom Jones, McDermott Will & Emery, Chicago, IL |
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