Why Are PBR RRG Reinsurance Captives Formed Offshore?
• The primary reason CIC’s are formed offshore is that these jurisdictions require substantially less start-up capital than a domestic state jurisdiction. The statutory requirements and insurance department regulations are more flexible, more lenient, and less expensive than their U.S. counterparts. which are to participate in PBR reinsurance programs • Since all PBR RRG reinsuring captives are required to make the 953(d) election (a tax election to be taxed as a U.S. corporation discussed in greater length below), these captives are not selecting offshore jurisdictions for tax purposes. • The offshore captive can be up and running in one month or less where Nevada (likely the best U.S. jurisdiction in terms of regulatory attentiveness and responsiveness) is longer than that.
