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Asset Protection through a Captive Insurance in the Cayman Islands |
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A non-insurance company could basically establish an insurance subsidiary to cover its insurance needs. This subsidiary company is what we call a captive insurance company. This setup is basically formulated for cost-saving purposes, and what is more satisfactory is the fact that captive insurance could be established offshore.
Almost 50 percent of big corporations and companies worldwide have their captive subsidiaries. These captive companies are commonly established in jurisdictions like Barbados, Cayman Islands, Bermuda, and Isle of Man. Most of these companies are under huge businesses, most of which are included in the Fortune 500 list.
This option is generally chosen not only for the purpose of asset protection but to diminish the cost of insurance coverage. It is also designed to cover insurance types that are pretty difficult to avail. And since it is created under offshore jurisdiction, there is no limitation when it comes to certain investments that might have restrictions under the U.S. Security and Exchange Commissions.
Cost effective benefits are numerous under a captive insurance. Since marketing, commissions and sales cost are eliminated, premiums become relatively lower than existing insurance policies. In such cases, overhead and operating cost are greatly reduced. And since a captive insurance is answerable to the mother company, policies could be formulated in a way that it benefits the principal benefactor accordingly.
Asset protection becomes very efficient under a captive insurance policy. The mother company could be very sure that all risks involved in an investment are readily covered. This benefit comes at a minimum investment. A captive insurance could be established in the Cayman Islands and the Bermuda for as little over $100,000.00. Basically, not only huge companies could afford to venture in this option.
Most people might see that a captive insurance sure is a very advantageous option, and most of the time it could also be used in a fraudulent manner, but thanks to a new law governing captive insurance, bogus captive insurance companies could now be eliminated.
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