This is a very specialized area within the insurance realm, but one that is of increasing importance and value to the larger business client. Satori Associates, Inc. has excellent direct linkages to several of the most stable and efficient offshore marketplaces. We have had a long term relationship with the principal attorney for one of the very best of these offshore entities. Offshores are certainly not appropriate for most businesses, and unfortunately, there have been many abuses to the system. There have been fraudulent and absolutely criminal misuse of this insurance vehicle, but this should not deter that particular special entity that might benefit by establishing their own offshore insurance company. There are many successful, stable, well administered, offshore companies owned by businesses that find advantage in doing so. Reasons for going offshore abound, but essentially the driving forces behind the decision to do so, are Cost and Coverage. Quite often the offshore is really a self insurance situation, in which the larger Insureds can dramatically lower their ultimate net costs. This can occur for a number of reasons: elimination of insurance taxes, broker commissions, carrier profits, industry minimum premiums or regulated minimum premiums for such circumstances such as workers compensation, self-insurance bond costs, and other costs associated with insurance. In some circumstances investment of loss reserves is less regulated through offshores, and can prove to be very advantageous. It is also possible to use offshores as the vehicle to hold funds outside of U.S.Taxation until required. The build up of investment interest in risk finance methodologies may be outside of U.S. taxation in many instances. Coverage issues are again of import. There are times when no viable domestic market exists for some format of desired coverage, but the offshore carrier could not only issue those coverage, but might also be able to reinsure all or part of the exposure through Lloyds or other facilities. Finally, some offshores allow for the writing of coverages for others (rent-a-captive) and actually become a profit center for their owner. We know of offshore support entities that will work in any specified currency, which can be of great help to international corporations. Satori Associates, Inc. can act as liaison between the parties in establishing and maintaining a legitimate, effective, offshore insurance carrier.
Revision Date: November 25, 2009