What is CapPlus?
CapPlus is a privately held domestic insurance company licensed to sell custom designed property and casualty insurance products to your operating company.  Ownership is usually comprised of the owners, executives and key managers of the operating company it insures.  More than 25 states have enacted legislation to allow for the creation of captives.

What types of risk can be insured?
A captive can insure any legitimate risk, such as deductibles, self-insured retentions, Directors and Officers Liability, Professional Liability (errors and omissions), Product Liability and Umbrella Liability to name a few. 

How does the captive issue policies?
Each policy is customized and reviewed by an actuary to ensure it fits your particular need.  By controlling both the risk assumed and the claims paid you can eliminate any doubt as to what or how coverage applies and ensure claims in the operating company are fully reimbursed.

How does this create additional liquidity for the operating company?
Premiums paid by the operating company to the captive are treated as a tax deductible expense which reduces the tax liability of the operating company and its owners.  Over time as the captive accumulates cash from the premiums and investment income, a portion of the cash can be loaned back to the operating company at market rates with proper documentation.     

Are there other financial and tax consequences that are beneficial?
When the operating company purchases a policy from the captive, it pays no brokerage commissions on the premiums. Considering that a typical broker receives between 10%-20% commission per year, the cost saving over a 10 year period can be substantial.

The CapPlus pays no taxes on premiums received. When either dividends are paid or the captive is liquidated, the owners pay taxes at the more favorable capital gains rate. If the owner of CapPlus is a trust, assets can be passed to the next generation without estate or gift taxes. Most other captives do not benefit from all of the tax consequences found in CapPlus.

It is this combination of financial and tax management that can produce an overall IRR* of 30% or more.

How big does a company have to be to establish a captive?
Generally, a company that has $1- $2 million of net income qualifies, but other considerations include the types of business risks, existing coverages and the availability of free cash flow.

Who manages the Captive Insurance Company?
Intuitive Captive Solutions is the leader in establishing and managing CapPlus captives. We customize your captive to fit your needs and annually act as your turn-key manager, providing annual audited financials, tax returns, actuarial updates and other regulatory filings.

For more information, contact Jim Landis, or Rick Eldridge with Intuitive Captive Solutions at 720.382.2100.

Intuitive Insurance Corp. is the parent of Intuitive Captive Solutions. Intuitive Insurance is a property casualty insurance agency with over 20 years of commercial insurance and risk management experience.  With access to  quality insurance markets we work as consultative partners with our clients by providing high quality financial, risk management, insurance purchasing advice and service to firms with significant intellectual, managerial, product, profession and property  exposures.