1. Private Insurance Company
Turning Risk into Equity
Mark Sims

2. What are Private Insurance Companies

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

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

5. Hidden Risks in your Business5

6. Still Not Convinced? 6

7. How does it work

8. Protected Captive
Premium Cycle
Structure
Risk Sharing
Cash Flow

9. 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

10. 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…

11. 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

12. 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.

13. Working with CapAlt
Working with CapAlt

14. Why CapAlt?
Structure Professionalism Banking Options

15. Formation process?
Data
Feasibility
Select
Implement

16. Costs?
Startup Fee
Capital
Management Fee
Time

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

18. VP OF BUSINESS DEVELOPMENT
MARK SIMS
VP OF BUSINESS DEVELOPMENT
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