Captive Insurance Companies Owned by Tax Exempt Organizations & Government Instrumentalities: Tax, Regulatory and Legal Issues

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This webinar will examine the unique issues facing tax exempt organizations and governmental instrumentalities in creating and owning a captive insurance company, focusing on how to avoid pitfalls such as negative tax and regulatory consequences. Topics to be covered include:
• Why tax exempt organizations and government agencies form captives;
• Types of captives for tax exempt organizations – what legal & tax constraints drive the structure;
• Onshore versus offshore considerations;
• Pros & cons of qualifying as an insurance company for tax purposes;
• Insuring unrelated parties, such as non-employed physicians, taxable joint ventures, etc.; and
• The impact of healthcare reform and changes in the reimbursement rules.

The webinar will include a practical case study of a state university system that has successfully formed a captive insurance company. The webinar will primarily focus on tax exempt healthcare providers but the discussion will apply to current and prospective tax exempt captive owners.

Educational Objectives:
• Recognize the legal and tax benefits of captive insurance companies for tax-exempt organizations
• Recall types of entities and captives entitled to tax-exempt treatment;
• Navigate the legal requirements and implications of forming a captive insurance company
• Identify situations whereby tax-exempt organizations may be subject to taxation, how much they can be taxed, and ways to avoid such situations
• Distinguish captive insurance companies from risk retention groups.



Thomas M. Jones is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  He focuses his practice on federal and state tax, insurance regulatory and legal matters concerning captive insurance and other alternatives to commercial insurance.  He works with multinational corporations, private business, taxable and exempt health care providers, trade associations, joint ventures and enterprises of all sizes.

Tom has extensive transactional experience in all major U.S. and offshore captive insurance jurisdictions, including Arizona, the District of Columbia, Hawaii, South Carolina, the U.S. Virgin Islands and Vermont, as well as Barbados, Bermuda, the British Virgin Islands and the Cayman Islands.

In 2008, the Captive Insurance Companies Association (CICA) presented Tom with its Distinguished Service Award.  Each year CICA selects the individual making the most significant contribution to the captive industry.  Tom also was honored by the Vermont Captive Insurance Association (VCIA) as the recipient of its 2005 Industry Service Award.  In 2001, Tom was one of three recipients of a special recognition award for captive insurance expertise bestowed by the Cayman Islands Government.  He has served as corporate legal advisor to the New York World Trade Center Captive since 2004.  Tom is ranked by Captive Review Magazine as #3 on its 2013 “Power 50” list of the most influential people in the captive industry globally. He is also recognized by Chambers USA and The Legal 500 United States as a leading captive insurance lawyer.