Captive Insurance Solutionsfor Healthcare Professionals

Surgical Captive, created by trusted leaders in the healthcare industry, is an innovative company dedicated to developing unique business services and solutions for healthcare professionals. We develop and administer turnkey Captive Insurance Companies, freeing our clients’ capital to invest, grow, and thrive.

WHAT IS A CAPTIVE INSURANCE COMPANY?

Business owners form

privately owned Captive

Insurance Companies to

protect themselves from

the risks associated with

business ownership. Rather

than paying insurance

premiums for a policy

to third-party insurers,

premiums are paid to the

Captive. Pre-defined risks

are underwritten with the

assistance of a third-party

actuarial team. Any reserves

realized from unpaid claims

remain an asset of the

Captive; protected from

creditors of the business

and available for investment

or disbursement to the

Captive owners.

CAPTIVE INSURANCE FOR HEALTHCARE PROFESSIONALS

Surgical Captive understands the

unique needs and complexities

of the healthcare business

environment. We assist

healthcare professionals and

business owners with creating

and administering Captive

Insurance Companies to self-

insure businesses and manage

associated risks. A full-service

company, Surgical Captive

guides clients through each

step of the process, from initial

assessment and consultation to

formation and administration of

the Captive Insurance Company.

ABOUT CAPTIVE INSURANCE COMPANIES

IRS Safe Harbor RulesAs part of a Surgical Captive Feasibility Study, we will analyze which of

the 3 IRS Safe Harbor Rules best suits your business.

• Single Parent Captive (Rev Rul 2002-89)

• Multiple Subsidiaries (Rev Rul 2002-90)

• Group Captive (Rev Rule 2002-90)

Captive Insurance Illustration

Operating Company

Insures the Uninsured Risks

Pays Tax Deductible Premiums to Cover Uninsured Risks

Premiums are Received Tax Free

Upon Liquidation, the Assets are Transferred to Owners

Captive Assets Grow, Funds are Reserved for Potential Claims

Owners of the CaptiveInsurance Company

Captive Reserve AccountUnder Your Control

Captive Insurance Company

against risk from creditors, business debts, attorneys, and litigation.

Furthermore, only owners of the Captive are able to file an insurance claim.

Insurance Coverage Flexibility Captive Insurance Companies can obtain insurance coverage for operating

risks not routinely covered by traditional insurance policies. Owners can tailor

policies to only insure risks they are willing to accept and obtain access to the

reinsurance markets that may have a greater ability and willingness to handle

such risks. By liberating businesses from the fluctuating market cycles of

commercial insurance companies, Captives provide better availability, stability,

and affordability on a wide range of commercial coverages.

SURGICAL CAPTIVE BENEFITS

Captive Insurance Companies are

often overlooked as a strategic

initiative by finance and tax

professionals, as the benefits

are not easily understood or

explained. With the proper

guidance from Surgical Captive,

the economic advantages of a

Captive program become readily

apparent. Such benefits include:

Ownership and Control Captive Insurance Companies

are completely controlled by

their owners, including all stock,

investments, and bank accounts.

Owners can regularly assess and

adjust risk by deciding which

to retain with the Captive and

which to transfer to reinsurance

markets. Control over losses also

improves by providing owners

with the resources to categorize,

measure, and manage these

costs while maintaining accurate

financial projections.

Asset ProtectionBusiness owners are often

litigation targets. By forming

a Captive Insurance Company,

business owners are protected

Reduced Insurance Costs Savings resulting from insurance cost reductions and profits routinely earned

by third-party insurers are controlled by the Captive. Captives have the flexibility

to adapt to changes in the pricing structure of the commercial insurance

market and to changes in the company’s business, risk tolerance, cash flow,

etc. Direct access to reinsurance provides benefits such as increased potential

capacity, lower pricing, coverage benefits, and reduced exclusions and allows

the Captive to limit its economic exposure.

Tax Savings 831(b) of the Internal Revenue Service (IRS) Code permits the Captive to

receive a certain amount of annual insurance premiums completely income

tax free. Tax savings start immediately and allow for flexible participation.

Annual insurance premiums paid to the Captive are fully deductible by the

payer as “ordinary and reasonable business expenses,” pursuant to Internal

Revenue Code (IRC) Section 162(a). The business owner decides when, how

much, and for how long the existing businesses will pay premiums to the

Captive. There are no restrictions regarding the amount of time the Captive is

in operation.

Improved Cash Flow With a Captive, the business can retain insurance premium dollars and profits

within the business enterprise, thereby increasing investment income on its

unpaid loss reserves, capital, and surplus. Control over losses also improves

by providing owners with the resources to categorize, measure, and manage

these costs while maintaining accurate financial projections.

Insurance Coverage Flexibility

Wealth Accumulation & Preservation Profits from premiums paid

are retained by the Captive for

reinvestment or disbursement.

As your partner, Surgical

Captive will administer service

& management fees, dividends,

and liquidation. Surgical Captive

will assist to preserve the wealth

your Captive has earned. Typical

investments include mutual

funds, stocks, bonds, and highly

liquid marketable securities.

Surgical Captive will advise

owners concerning appropriate

withdrawals or transfers in order

to receive the most favorable

economic treatment possible.

Insured RiskRisk Not Coveredby Insurance

UmbrellaDeductibles

Exclusions

Operating Risks

A/R Concentration

Construction Defect

Credit Default

Disability

EarthquakeD&O/E&O

Litigation Defense

Mold and Pollution

Product Warranty

Retention

Worker’s Compensation

Excess

General Liability

SURGICAL CAPTIVE SERVICES

Captive FormationFeasibility StudiesCost Benefit AnalysisStrategy SessionsCaptive Structure & Domicile SelectionTurnkey Captive FormationFinancingBenchmarking Studies

Captive ManagementAccountingActuarialComplianceClaims ManagementLegalAuditTaxation

WE ARE DEDICATED TO YOU

Surgical Captive is dedicated to delivering

unique self-insurance solutions for

physicians and business owners in

the healthcare industry. By liberating

businesses from the market cycles of

commercial insurance companies, we

provide wealth opportunities and asset

protection with outstanding financial

results. Contact us today to learn if a

Surgical Captive solution is right for you.

800.969.9442www.surgicalcaptive.com

800.969.9442www.surgicalcaptive.com

3100 Monticello Avenue

Suite 450 • Dallas, TX 75205