What You Should Know

Recently, the Courts ruled that Syzygy Insurance Company (“Syzygy”), a micro captive created by Highland Tank & Manufacturing Co. and its Associates (“HT&A”) did not qualify as an 831(b) micro-captive entity between the years of 2009 and 2011. Federal courts have been especially assertive outlining bad fact patterns for certain captives, as seen in similar case results such as Avrahami v. Commissioner (“Avrahami”) and Reserve Mechanical Corp v. Commissioner (“Reserve”).

Understanding the criteria and results of these court rulings is imperative to ensure that your clients’ captives, or even your own, are appropriately managed and operated.

In this whitepaper, we outline an in-depth analysis of the court case and decision, and provide you with a checklist for ensuring compliance and validity for your captive, no matter its size. Download to learn more about:

  • Circular flow of Funds
  • Arm’s-Length Contract
  • Valid and Binding Policies

and more, so that your captive isn’t the next one getting negative press!

 

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Prabal Lakhanpal

Prabal Lakhanpal

Prabal is a Senior Consultant with Spring and leads technical and management support in the areas of employer-sponsored and voluntary employee benefits, product development, technology solutions and captive insurance. Prabal joined Spring in 2015 as a graduate from Babson College, where he graduated with a master’s degree in Business Administration. Prior to joining Spring, Prabal worked as a consultant and advisor to clients in various industries and sectors.