Welcome to CIC Expert.com
Helping entrepreneurs, business owners and professionals build stronger enterprises by better managing risk through strategic use of simple, powerful, flexible, and highly-customized CIC (or “Captive Insurance Company”) solutions.
Mike Arnold, MBA
- Led passage of the legislation enabling CICs to operate in Texas.
- Formed and served as Founding Chairman of the Texas Captive Insurance Association.
- Business Development Director of Captive Architects.
- Teacher of CIC Continuing Professional Education courses for CPAs, attorneys and other professional advisors.
- CIC advisor to a wide range of firms, families and professionals.
Is a CIC right for me?
CICs are used today by a wide range of business owners, families and professionals to help them:
- Best prepare for hidden risks that can blindside your business,
- Preserve and control capital,
- Protect assets from creditors and lawsuits,
- Often gain other benefits.
This solution is simple, powerful and encouraged by the US Congress and state legislatures across the country to help strengthen small and mid-sized companies, which are the bedrock of our economy. From farmers and ranchers, to doctors and architects, to sophisticated entrepreneurs and family offices — and all points in between — Americans in business today are discovering the power and peace of mind uniquely offered by CICs.
There are two primary variables to determine if a CIC is right for you. First, does your business face hidden risks that can seriously impact your bottom line? For most folks profitably engaged in producing or delivering goods or services, the answer is YES. Second, could you sustain premium payments to your CIC of $150,000 or more? If the answer to that is YES, then you should seriously look at a CIC solution.
- If you were directed here by an professional advisor, contact them to determine your next steps.
- If you are not served by a professional advisor who understands CICs, contact me directly and I’ll be happy to serve you.
Information for professional advisors.
I educate, consult and collaborate with professional advisors of all types to help them better serve their clients.
The nature of this relationship can vary based on your client engagement practices.
There are a lot of self-proclaimed “captive insurance experts” out there, and unfortunately, many of them give the industry a bad name. As with any solution, there are lots of ways to needlessly push the envelope and cut corners. Done right, CICs are a safe, powerful and irreplaceable solution to many of the challenges facing small-to-midsized business today. You owe it to your self and you clients to learn about CICs, and the right way to use them.
If you have a client who you may benefit from a CIC solution, let’s talk. I will help de-mystify CICs, bring you up-to-date on the latest in the industry, outline the variables, identify safest path, help you determine if this is a right fit for your client, and, if it is, help set up and manage the right CIC solution to deliver maximum bottom-line results, compliance, and peace of mind.
Also contact me if you would like me to teach a CE course for you or your firm, either in person or online.
IMPORTANT: New CIC disclosure requirement.
UNDERSTANDING IRS NOTICE 2016-66: The IRS recently required disclosure for 831b Captive Insurance transactions. What does this mean for CIC owners and advisors?
Micro Captive Insurance Companies (CICs) are a popular and fast-growing risk management tool employed by firms, families and professionals across America.
Over the past decade, regulatory barriers have come down, state Departments of Insurance have embraced CICs, best practices have clearly emerged, and a large industry of supporting professionals has arisen in this space.
Earlier in 2016, in recognition of the power and growing popularity of this tool to strengthen small- and mid-sized businesses, the US Congress nearly doubled the amount of tax exempt premium funds that may be paid into a CIC. As a result, many observers expect a CIC boom in coming years.
As CICs have grown, so has abuse of this tool. Unethical practitioners have manipulated the system and pushed the legal envelope to use CICs primarily as a “tax dodge.” Common tactics used by these abusers include:
- Complex and ”creative” ownership structures, including obscure offshore domiciles, trust ownership of CIC, etc.
- Shoddy or downright fraudulent actuarial studies to produce completely unnecessary “insurance policies” and highly inflated “premiums.”
- Reliance on sham “risk pools” (usually owned by the promoter) to, on paper at least, meet the legal definition of “insurance.”
- Managing of CIC reserves in a way that proves the owners have no interest in running the CIC for risk management purposes.
Due to the largely un-standardized nature of the CIC industry, and in light of the expected boom in CIC utilization, through Notice 2016-66, the IRS has recently required all CIC owners and many advisors to disclose their involvement in CICs. The stated purpose of this request is to enable them to learn how to better identify the “red flags” that indicate abuse.
With the information request being retroactive for 10 years, it is inevitable the IRS will be flooded with data. In that data, there will no doubt be mountains of clear-cut instances of abuse. CIC abusers have good reason to be alarmed by this turn of events.
This IRS information request does not change long-standing CIC laws, regulations and clear-cut case law. A good CIC yesterday is a good CIC today. Ethical owners and advisors who embrace CICs as a powerful risk management tool have nothing to fear. In fact, they can only benefit from the IRS’s efforts to “drain the swamp” and run off the unethical practitioners.
CICs IN THE NEWS
An Insurer of One’s Own? It’s Possible, With Caveats
The New York Times
The Benefits of Captive Insurance Companies
Journal of Accountancy
Captive Owners Look Beyond Coverage of Plain Vanilla Risks
(c) 2016 by Mike Arnold
NOTE: Via this website and video, I am not providing tax, legal or accounting advice. This has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before implementing any strategy.