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| Captive Insurance Companies Division |
Wyncrest's Offshore Division is positioned to grow with a growing offshore exploration and development trend. Insurance as a financial product is in a unique position to meet real life financial needs. When using offshore insurance in offshore holding vehicles, this important financial product becomes an even more powerful planning tool.
An insurance policy provided by an International Captive Insurance Company, for which it is possible to find reinsurance more easily on the part of a conventional reinsurer, can solve similar problems for many firms. In comparison with costs of coverage provided by domestic insurers, the insurance premium rate at the international institution will probably be much lower. |
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The considerable advantages of captives have led to the development of a major worldwide captives industry, and IOFCs have vied with each other to establish attractive regimes for captives. Since 1913,insurance used as a financial planning tool has benefited from special treatment under the internal Revenue Code. For income tax purposes, the build-up of income under an insurance product through compound interest is not subject to tax.
Recent developments in US tax law also allow limited liability companies to be easily treated as partnerships under the check-the-box rules. With some offshore jurisdictions providing special or Heightened creditor protection for limited liability companies, the use of an LLC -- which for US tax purpose, is treated as a partnership--becomes an outstanding insurance planning platform. While the life insurance trust has significant restraints and limitations, such as irrevocability, a limited liability company structure is a flexible arrangement and allows changes to be made in the future that were not contemplated when the policy insurance was first acquired.
As a further refinement, an insurance limited partnership of LLC can be utilized as part of a plan to be funded by monies set aside in an IRA .In this way, insurance may be acquired using pre-tax dollars. The important point to note is that insurance is no only a valuable financial product, but there are a number of legal entities that can be used offshore to serve as insurance policy-holding structures. |
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