ENG26SS205. Tax Deferred Risk Mitigation for Business: Understanding the 831(b) Tax Code, presented by SRA 831(b) Admin

This session will allow attendees to examine how a business can use 831(b) microcaptives as an alternative risk finance solution for under- and uninsured risks. This presentation discusses the tax and accounting implications of microcaptives, investment regulations, the types of fortuitous risks that can be included, domicile options available, how reinsurance is applied, and who is a fit.

Learning Objectives:

• Recognize the benefits, risks, and opportunities of using a captive to finance an entity’s risks; the aspects of a microcaptive; and the types of risks that can be included in the program.
• Identify factors to be considered in evaluating the cost of risk and the various ways in which the costs of financing risks through a captive can be lower than the costs of commercial insurance or self-insurance plans.
• Recall the federal requirements that must be met for a microcaptive to qualify as an insurance company for tax purposes.
• Identify the contribution and distribution requirements of the captive and the administration functions, including required filings.