Captive Basics

PrimeFortress Management LLC provides formation and advisory services to captive insurance companies. Captive insurance companies are appealing to business owners who have experienced low insurance claims in relationship to the insurance premiums paid by their businesses. Additionally, establishing a captive insurance company can be attractive to business owners who wish to reduce insurance costs by assuming more risk.

What is a Captive Insurance Company?

A captive insurance company is a private insurance company that has been established to insure some of the risks of a single-parent company or a group of related businesses, association members, or an industry group. A captive insurance company is an alternative to traditional insurance arrangements.

Benefits of a Captive Insurance Company

In most cases, the captive can be used in conjunction with traditional insurance or stand alone with reinsurance for larger or catastrophic losses. In either case, some benefits of setting up a captive insurance company are:

• Lower insurance costs
• Control risks assumed, and premiums paid associated with the risks
• Control claims and loss management
• Obtain and tailor coverage to meet your specific needs
• Accumulate investment income
• Control cash flow
• Reduce income taxes
• Protect assets from predatory lawsuits

PrimeFortress Management, L.L.C.

Our slogan states, “PrimeFortress is the tailored alternative to traditional insurance”. PrimeFortress can help guide and advise you through the following:

• Advise as to the design and tailoring of coverage to meet your specific needs through a risk management analysis that provides options for you to select based on your specific needs, risks, tax status and other variables.
• Maintaining your own private captive insurance company allows your premiums to accumulate investment income. Building a fund for the future protection of your net worth puts you in control of your insurance costs and may provide significant tax benefits. PrimeFortress provides management advisory and guides you through this entire cycle of operation year to year as your needs and growth dictate.
• Your own private insurance captive will provide you access to the reinsurance market that could act as an umbrella for your non predictable or catastrophic losses at wholesale rates. PrimeFortress provides contacts and options for you to select in that process.
• If you have had difficulty in obtaining coverage at acceptable rates but have had low loss experience and want to take advantage of possible tax advantages currently available to small insurance companies, you may be a prime candidate for your own captive insurance company.

Captive insurance companies, through PrimeFortress, can be formed for as little as $30,000 with a monthly advisory fee to guide operations based on the complexity of coverages. This concept is clearly not just for large companies. As a matter of fact, the Internal Revenue Code provides favorable tax treatment for qualifying small insurance companies  PrimeFortress will run a comprehensive financial model illustrating what your captive could look like in three years.

If you have an interest to discuss whether this concept is for you or you may have a client that is, please contact us.

PrimeFortress Management, L.L.C. R. Thomas Savage, Jr., Managing Member 5154 Ravens View Road, Johns Island, SC 29455 Phone/Fax: 843.557.1782  1.866.704.5835 Email: tomsavage@primefortress.com