Private Insurance Company Turning Risk into Equity Mark Sims

What are Private Insurance Companies

Private Insurance Company Captive 2.0 Risk Management Unique Puerto Rico structure No 831b Baggage Turn Risks into Assets © 2017 Captive Alternatives, LLC

Types of Risk High Frequency – lots of small claims Low Frequency – rare, high value claims

Hidden Risks in your Business 5

Still Not Convinced? 6

How does it work

Protected Captive Premium Cycle Structure Risk Sharing Cash Flow

Madison International PROTECTED CAPTIVE Premium Cycle Business Owner Madison International Issues Policies MadRE Provides Risk Distribution Protected Captive Reinsures risks from MadRE Private Insurance Company surplus available to owner for investment. Business directly procures selected risk coverages from Madison International Insurance Company This is the high level overview. Premium flows around the cycle annually. Now lets examine the detail… MadRE flows premium less losses to captive. Madison transfers the risk and the premiums to MadRE

PROTECTED CAPTIVE Structure Puerto Rico Separation of cell Tax Benefits Risk Sharing PC 999 PC 001 PC 002 PC 005 PC 004 PC 003 MadRE Madison International Risk Shifting when Insured buys policy from Licensed Insurer – Madison International Puerto Rico is a unique domicile because Structure is a cell organization – efficient, cost effective and all assets are legally protected PR also has tax benefit Risk sharing is accomplished by sharing risk between the Protected Captives. Lets take a look…

Risk Sharing CAPTIVE Every claim split 50/50 with MadRE. PC 003 MadRe Risk Fund PC 001 PC 002 PC 003 PC 004 PC 005 Every claim split 50/50 with MadRE. Every Captive pays pro rata share of claim. 11

Madison International Premium Flow Entity Insured Madison International Madison RE Protected captive Cash Flow Premium 100% of Premium 40% held for 1 Year 60% immediately Risk Distribution 100% of Risk 50% This is how the premium flows inside Madre 40% is retained for a year while the claims period runbs 60% is transferred to the captive and invested After one year the 40% funds held flows to the captive after deducting any claims incurred.

Working with CapAlt Working with CapAlt

Why CapAlt? Structure Professionalism Banking Options

Formation process? Data Feasibility Select Implement

Costs? Startup Fee Capital Management Fee Time

Captive Gives you Risk Management Tax Planning Asset Protection Estate Planning Investment Options Exit Strategy 17

VP OF BUSINESS DEVELOPMENT MARK SIMS VP OF BUSINESS DEVELOPMENT msims@captivealternatives.com c: 812-327-3341 p: 404-823-6200