What companies can benefit from an NCFC captive?
Sep 13, 2017
All for profit companies interested in managing their tax liabilities can benefit from a NCFC captive. A full range of insurance risks such as Workers’ Compensation; General Liability; Commercial Auto; Medical Stop Loss; Professional Liability; Extended Warranty; Deductible Reimbursement; can all be funded through NCFC Captives.
U.S. companies with foreign operations and foreign companies with U.S. operations frequently look to NCFC captives for the cash flow benefits they provide while minimizing double taxation issues.
Also NCFC captives have a distinct advantage for funding catastrophe exposures since profits and investment income can accumulate over time to provide a significant loss reserve built from tax free dollars. This can be achieved without the need for IBNR accounting which is typically not possible for high severity, low frequency exposures. Typical examples would be Earthquake; Windstorm; Products Recall; Cyber Liability; Commutation and Loss Portfolio Transfer business.