Overview With Returns Sample

Captive Monetization Strategy

Allied Professional Group, (“APG”), in conjunction with its affiliated partners developed and combined a unique set of financing, risk transfer, tax minimization and estate planning strategies that not only provide exceptional tax advantaged benefits for the captive owner but also mitigate structure and planning risk to the Captive.

REQUIREMENTS

Excess Capital and Surplus (“C&S”) of $10,000,000
Determined as Total C&S less Regulatory Capital and less Writing Ratio Capital

BENEFITS

Additional benefits to the captive owner and maximization of leverage on excess surplus.
Utilization of surplus on the most tax advantaged basis – replacing dollars paid for dividend tax while optimizing income tax and estate tax outcomes.
If structured properly, enhanced creditor protection and tax-free supplemental income.
Captive retains ownership of collateralized assets – growth and interest income continue to benefit captive.
Captive retains existing advisory / asset management firm and positions – no movement of funds required.

Example contribution on $10,000,000 surplus pledge and returns at given ages. Max tax-free income design.

EXPENSES

No direct costs to Captive or captive owner — minimal cash outlay – with the exception of the economic benefit received by the owner taxed at Applicable Funds Rate (“AFR”). An expense that can be capitalized and collateralized.
AFR applied to the economic benefit of the collateral posted as if it were a “loan”, paid by life insurance policyowner at short-term (3.66%, up to 36 months), mid-term (3.19%, 37 to 108 months) or long-term (4.55%, longer than 108 months) rate. This amount may be capitalized and collateralized by the Captive.
Life Insurance premiums paid from proceeds secured by a collateralization pledge via a proprietary Direct Pay Letter of Credit (“DPLoC”) financing mechanism whereby liquid funds are created through a special bond issue rather than out-of-pocket or bank financed.
Accounting expertise is available from an international tax firm at no direct cost.
Tax liability insurance is available through a Lloyds of London syndicate at +/-4.00% of the tax liability.

INFORMATION CONTAINED HEREIN IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED LEGAL NOR TAX ADVICE

Disclaimer

Allied Professional Group (APG) affiliates with cross disciplinary experts in legal, tax, accounting, audit, actuarial and compliance in order to deliver to captive managers and captive owners solutions to optimize and to enhance the captive experience.

Our proprietary approaches provide tax efficient avenues to transform excess capital into material financial benefits.