All insurance companies are formed pursuant to state law, with captive insurance companies insuring the risk of the company that owns it. Instead of a company buying an insurance policy, they establish an insurance company and then self insure the risk associated with the company. Some states recognizing the need to recoup or recompense last tax revenue, have adopted self procurement taxes whereby a home state will impose a tax on the amount of premiums paid to a captive in another jurisdiction by certain businesses located in the home state.
This is a great example of enterprise risk.
Please contact us at Contact@OxfordRMG.com or 410-472-6490 to speak with one of our captive research specialists!