831 (b) Captives
The qualifications for forming an 831(b) captive insurance company include:
• Owning a closely-held, profitable business
• Insurable risk exposures inside the business
• Pre-tax profits of at least $1 million per year
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MSI knows 831(b) Captives like no other Captive Manager. 831 (b's) enable small to mid-sized companies to enjoy the benefits of owning an Insurance Company. Due to our structure, companies with as little as $1 Million in gross revenues can enjoy captive benefits which far exceed costs.
An 831 (b) effective allows a small insurance company to receive up to $2.45 million per year in premiums, without paying any income taxes on those premiums.
The 831 (b) election does not affect - at all - the deductibility of the premiums paid by the operating business to the Captive. Premiums are otherwise deductible; they may be deducted by the operating business just like any premium payments to an insurance company.