Chapter 7: CICS Captive Solutions So, you've dived into the captivating world of captive insurance! You've discovered the ins and outs of different types of captives, delved into captive formation and licensing, and even explored the concept of domiciles as the cozy homes of captives. Now that you've gathered all this knowledge, it's time to understand how captive solutions play into the entire process of a captive insurance company. Picture this: captives are like a superhero team, each with their unique powers and strengths. Knowing about captive solutions allows you to harness the full potential of captives, unleashing their superpowers to protect your business from risks, achieve financial rewards, and gain greater control over your risk management program. And as a captive manager, CIC Services’ team of experts guides you through the process and ensures your captive is well managed. Since 2005, we’ve helped business owners, CEOs, CFOs and risk managers take control of their risk management and turn their risk into wealth. Our proven track record, credibility and recent wins speak for themselves. Our firm was named 2023 Captive Manager of the Year by Captive Review. And in 2022, after five long years of litigation that went all the way to the U.S. Supreme Court and back, a federal district court in Tennessee ruled in favor of CIC Services and determined that the IRS failed to comply with the Administrative Procedure Act (APA) when it issued Notice 2016-66 in CIC Services, LLC v. IRS. The case is precedent-setting and has opened the door for businesses to challenge the IRS and illegal tax rules—a win for businesses across the country. The CIC team also authors articles for renowned media outlets where they share their expertise and experience managing captives including Entrepreneur, CPA Practice Advisor, Advisor News, Risk Management, Treasury & Risk and captive insurance trade publications. So, buckle up and get ready to uncover the importance of captive solutions in this exciting chapter! 7.1 Alternative Risk Transfer (ART) In the world of risk management, Alternative Risk Transfer (ART) serves as a fascinating marketplace where unconventional methods of risk transfer, such as captive insurance companies, come into play. This vibrant marketplace encompasses various entities and approaches, including pools, trusts, and risk retention groups (RRGs). ART opens up a realm of possibilities, allowing entities to: 3. Align their risk management program more closely with the specific risks they face. 4. Establish a stronger connection between their own loss experience and insurance costs. 5. Bid farewell to subsidizing underperforming businesses with unrelated risky ventures. It's worth noting that ART has been gaining popularity over time and has now become one of the largest premium segments within the insurance industry. Companies have come to realize the 1. Retain a portion or the entirety of their risk exposure. 2. Keep a share of the profits generated from insurance.
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