Captive Insurance with CJM Wealth Management

Transcription

1 Captive Insurance with CJM Wealth Management Table of Contents About Captive Insurance...pp 2 Why Form a Captive?...pp 3-4 What Next?...pp 5 About CJM Wealth & CEO Charles Massimo...pp Long Island Avenue Deer Park, NY Contact : (866) [email protected] Website :

2 Captive Insurance Captives provide opportunities for sophisticated entrepreneurs and business owners who understand the long term benefits that come along with owning an insurance company. CJM Wealth Management has partnered with one of the largest middle-market captive administrators in the world to provide a turn-key captive insurance company formation and management service to businesses throughout the United States. We are here to help business owners successfully explore the financial benefits and risk transfer opportunities that Captive Insurance can provide. Approximately 90% of S&P traded companies own Captives, and until recently, the market has been closed to small and medium sized businesses. However, over the past several years, that landscape has changed significantly. Today, businesses with annual revenues of $10,000,000 and up can benefit from what Captive Insurance may provide. Very simply, a Captive Insurance Company, is a legally licensed limited-purpose property and casualty insurance company that is owned by its parent company (your core business). The captive provides insurance to the parent company, based on that company s individual needs and types of risk. Because every business has different risks and long term views, each Captive is designed to meet the needs of that business on an individual basis. At CJM we educate business owners about the various types of Captive Insurance solutions available, walk them through the application process, and ultimately, help them own an insurance company that exists to benefit our client s core business. We provide our customers with a no cost, no obligation Captive Insurance educational seminar, that will give business owners and their constituents the knowledge they need to determine if a Captive makes financial sense for them, or not. 2

3 Why form a Captive? It is our experience that there is very few expenses business owners dislike paying more than: #1 Taxes #2 Insurance Captive Insurance could be a solution to help you reduce your expenses on both. Historically, Captives were formed by large businesses for two reasons: They were unable to find the insurance they needed for a certain risk they experience in their line of work. The cost of the insurance was just too expensive to purchase from the standard market place. Although both reasons are justifiable for starting your own captive, there are plenty more reasons today why small and medium sized businesses are forming Captives. Over recent years, the market has become much more transparent, and has given rise to a new breed of Insurance Company that CJM Wealth Management would like to help you explore. Below are a few other benefits that come when you own an insurance company: Paying for Insurance is a traditional business expense, which means its tax deductible. Depending on whether or not your Captive chooses to take the IRS 831b election, the Captive can receive up to $1,200,000 per year in income (premium), income tax free. As an insurance company, you have the capability to invest your reserves in a way that meet IRS and Department of Insurance guidelines. This is typically done via general stock market investments, bonds, purchasing annuities, and certain life insurance products. Depending on your company s investment objectives, CJM can help you explore the various investment opportunities. Captives are great way of filling existing gaps in property and casualty coverage that exist either due to the owners lack of interest in paying the traditional insurance premium, or because the insurance is too expensive. Captives can solve that problem because your insurance company will be responsible for producing (with proper guidance) a policy that addresses the precise claims you wish to address. Here is a list of several policies that could be included in your captive: Business Overhead Key Customer Key Employee Contingent Business Interruption Key Supplier Crisis Management General Liability DIC Product/Services Recall Legal Expenses IP Infringement 3

4 Key Contract Professional Liability Regulatory Changes Cyber Liability Collections Wealth transfer is another benefit a Captive may provide. This is because the owners of the Captive and the owner of the core business don t have to be the exact same. In some instances, they can be totally unrelated. Captives can be owned by trusts, parents, children, etc. Sharing ownership of the Captive is at the discretion of the business owner who sets the Captive up to begin with. Captives may also provide its parent company with the ability to produce a new profit center. Best Buy s warranty program is a great example of how a business can turn offering a product to its customers (product warranty), into a tremendous business opportunity. Many people also don t know that a little insurance company called AllState, began as a captive insurance subsidiary of the Sears and Roebuck Company. 4

5 What Next? Simple Contact CJM Wealth Management to schedule a Captive Insurance phone consultation. During this consultation we suggest you go ahead and contact your CPA, CFO, board members, advisors and other constituents and find a minute time frame that will work to sit down and learn exactly how a Captive might fit into your business model. Ask questions, and meet the team who will ultimately be helping you navigate the application, formation, underwriting, actuarial study, implementation and management of your insurance company. At the end of this meeting, you will have a firm understanding of how the overall process works, what s expected from each party involved, the costs, and ultimately have the information you need make an informed decision about Captive Insurance. It s important to understand that you, the business owner, are not going to be expected to manage, run, or deal with the day-to-day operations that are involved with running an insurance company. That is why business owners choose New View. We have captive management firms who do all of that for you. The first step is to call or , and set up an appointment for a minute initial consultation. After that, the decision is up to you. 5

6 About Charles Massimo and CJM Wealth Management When it comes to managing money, ideas are the most powerful drivers of growth and security. That is why at CJM Wealth Management; we are constantly searching for and deploying exceptional ideas, strategies and insights born of our experience and relentless research on behalf of our clients. Focused on business owners and professionals, we understand and seek to leverage the relationship and the potential integration of their corporate and personal interests. We understand their unique world view, set of values, challenges and opportunities and the multiple ways that financial risk impacts their lives. CJM President and Founder, Charles Massimo (IAR), started his career in 1984 as a compliance officer at Shearson Lehman Brothers. He moved to New York Life Insurance Company as a senior representative and later joined Merrill Lynch as a financial consultant in the Private Client Group. In 1999, he moved to Smith Barney as vice president of investments. While his career was advancing, Charles couldn t help but feel as though there was a piece missing from the big picture. Determined to run a firm that put the interests of its clients above everything else, while practicing true wealth management with integrity and ethics, Charles took a leap of faith and founded CJM Wealth Management in The firm now manages nearly $300 million in client assets and has been named the top wealth management firm on Long Island by NABCAP in Charles, along with his team of expert wealth management advisors, focus on a wide range of issues from tax and estate planning, to life insurance and the use of trusts- that can have a beneficial impact on their clients' holistic financial lives. At CJM, we manage, monitor and continually adjust the unique strategies we develop and execute them in order to build and safeguard our clients' wealth. We realize that each of our clients has a vision of what they want their lives and that of their loved ones, to be. To Charles and the dedicated CJM staff, this means a life marked by a level of professional fulfillment that comes from knowing they have helped their clients achieve their financial goals, build the life they desire and benefit from having a trusted advisor with whom they enjoy a warm, open relationship. This is the CJM signature. 6