Choosing a domicile.
■ Regulatory environment. Some jurisdictions are friendlier than others, or their
statutes may permit different used and forms of captives.
■ Minimum capitalization requirements – varies between jurisdictions from
$150,000 to $750,000. Separate series of a group captive requires risk-based
amount of capital, typically
■ Start-up costs and annual maintenance – typical start-up costs range from
$50,000 to $80,000 for pure captive (plus required capital) and from $20,000
to $25,000 for cell (or series) of group captive.
■ Underwriting risk classification
• Traditional coverage or non-traditional coverage, such as loss of license.
■ Tax implications.
• Small insurance company with premiums less than $1,200,000. See
Section 831(b) of the Internal Revenue Code. Applies to US tax-law
compliant companies.
• Excise taxes on premiums paid for non-US captives.
■ Regulatory environment. Some jurisdictions are friendlier than others, or their
statutes may permit different used and forms of captives.
■ Minimum capitalization requirements – varies between jurisdictions from
$150,000 to $750,000. Separate series of a group captive requires risk-based
amount of capital, typically
■ Start-up costs and annual maintenance – typical start-up costs range from
$50,000 to $80,000 for pure captive (plus required capital) and from $20,000
to $25,000 for cell (or series) of group captive.
■ Underwriting risk classification
• Traditional coverage or non-traditional coverage, such as loss of license.
■ Tax implications.
• Small insurance company with premiums less than $1,200,000. See
Section 831(b) of the Internal Revenue Code. Applies to US tax-law
compliant companies.
• Excise taxes on premiums paid for non-US captives.