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Over 33% of the Fortune 500 companies own captive insurance entities and many are used in a warranty capacity.
Total captives worldwide rose from 6,074 in 2021 to 6,191 in 2022 — an increase of almost 2% (Business Insurance Captive Managers and Domiciles March 2023).
Section 831(b) of the Internal Revenue Code allows insurance premiums paid by a business to be 100% deductible to the sponsoring business while not being con-sidered income to the captive when the premiums are received.
The allowable tax free premium allowed to be paid into a captive is $2.2 million.