Product Description
A captive insurance company is, in a nutshell, an insurance company formed by a business owner to insure the risks of the operating business. The operating business pays premiums to the captive, and the captive insures the risks of the operating business. A captive is much more than an exotic form of self-insurance: It is the creation of a new insurance company that has the potential to grow from being a mere captive into a full-blown insurance company seeking to pr… More >>
Tags: Adkisson's, Captive, Captives, CloselyHeld, Companies, Groups, Insurance, Introduction, Retention, Risk
5 responses to Adkisson’s Captive Insurance Companies: An Introduction to Captives, Closely-Held Insurance Companies, and Risk Retention Groups
Jay Adkisson’s book on captive insurance companies is a good starting point for anyone who wants an overview of an often overlooked or misunderstood subject. The book is a little heavy on statutes and some case law, but otherwise gives an excellent introduction to the benefits and risks of establishing and maintaining these structures.
Rating: 4 / 5
As an advisor, I’ve had clients repeatedly ask me about captive insurance companies but I didn’t know much more about them and simply referred them to people like Jay who dealt with them. They always seemed like a “black box” planning technique where the secrets of how they worked were hidden from the unitiated. With this book, Jay opens that box and gives a great explanation of what captive insurance companies are, how they work, what it takes to get them licensed, how they are taxed, what policies they can issue, where they can be formed, and a bunch of other stuff that helps advisors like me understand the basic concept. I think this would be a great book to give as a gift to clients who were interested in captives as it explains their benefits — and limitations — quite clearly.
Rating: 5 / 5
This is an excellent book from the perspective of clients and advisors who are planning to form a captive insurance company to understand how it fits into their overall structure. This is a book for attorneys, accountants, and financial planners — as well as prospective captive clients — who have not heretofore been introduced to the topic of captive insurance. This book gives a wonderful explanation of what a captive is, what is required for the captive application, how a captive operates, the basic IRS rules and regulations, and how a captive fits into the overall corporate or family organizational chart.
This book makes no pretense of being for insurance brokers and agents who are looking for insight into the minutae of the commercial insurance business, such as where to look for quotes on workers compensation fronting, finding reinsurance, how retention agreements should be drafted, etc. But since most insurance brokers and agents dislike captives because they cut into their commissions, they will probably not be recommending captives to their clients anyway. One of the biggest benefits of a captive is to eliminate the costs of the broker’s or agent’s commissions and put those to work for the captive owner, so the hostility of brokers and agents to the concept of a captive and their spreading of patently false misinformation about captives should not be surprising.
Rating: 5 / 5
Despite its size, this book by Adkisson is really a pamplet devoted to the very basics of captive insurance companies. About 3/4 of the book is filled with appendixes related to key court cases related to IRS taxation, which unfortunately are not adequately discussed by the author in the text. One positive is the long list of policies the captive can write to cover innumerable business liabilities. The author’s opinion is strung throught the book without successful examples of innovative risk retention solutions, and in summary anyone interested in captive formation should basically contact the author directly to get “expert help” since so few people really know how to do it. Actually, P.A. Baucutt’s book and the recent one by Westover are a better combination of old and new to get your feet on the ground.
Rating: 2 / 5
I’m in the process of determining whether a captive makes sense for my company. Mr. Adkisson’s guide is very imformative. He is a little weak in his pure insurance knowledge but the concepts are more creative and thorough than others I have researched.
Rating: 5 / 5
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