Sponsored by The ABA Section of Real Property, Trust & Estate Law

1. www.ambar.org/rpte
Why Clients Across the Spectrum are Increasingly Using
Captive Insurance Risk Management
Tuesday, June 17, 2014 | 1:00 PM Eastern
Sponsored by
The ABA Section of Real Property, Trust & Estate Law

2. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
The Market
• Converging Demand: Risk Management and
Wealth Management
• Accelerated by Great Recession, ATRA and
Demographics
• Family (Privately-Held) Businesses – The
“Epicenter”

3. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Family Businesses
• Significance to U.S. Economy
• Significance to Growing Demand for Wealth/Risk
Planning
• Some Family Business U.S. Metrics
– More than 80% of U.S. businesses
– Approx. 60% of U.S. employment
– Approx. 50% of U.S. GDP
– Concentration of individual wealth

4. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Captive Insurance Risk Management (“CIRM”)
• Macro Context: More than $40 trillion of assets
expected to transfer in next 4 decades
• Increasing Use of CIRM
– Privately-held businesses
– Publicly-owned companies
– Nonprofits
– Governments

5. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Captive Insurance Risk Management (CIRM) –
Reasons for Use
• Less expensive than commercial insurance
• More efficient risk management
• Better coverage
• Cost-effective and predictably stable
• Able to protect, preserve and grow capital

6. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Captive Insurance Risk Management (CIRM)
• What is a Captive?
• A Customizable Solution
• Major Benefits
– Risk Management
– Capital Benefits
• In U.S.
– State regulation
– Majority of states have captive laws

7. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Captive Insurance Risk Management (CIRM) –
Practical Uses
• Business risks for which commercial insurance is
too expensive or unavailable
• Retained risks
• Coverage gaps
• More efficient risk management alternative

8. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Holistic Wealth Planning and Captive Insurance
Risk Management
• Common Objective: Protect, Preserve and Grow
Capital
• Designing the Captive for the Client
– Suitability and Feasibility
– Customization
– Alternatives

9. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Integrated Wealth Planning with the Client’s
Captive
• The Captive as an Asset
• Planning for and with the Captive Asset
• Example: Client owns and operates 5
Automobile Spas

10. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Example: Client owns and operates 5 Auto Spas
• Types of Business Risk to Captively Insure
– Casualty (injuries to persons on premises)
– Errors & Omissions
– Employment Practices Liability
– Property (flood and earthquake)
• Structuring the Captive: A Serialized LLC
– 4 Series Business Units (“SBUs”)
– Centralized Management

11. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Planning Considerations for the new Captive Asset
• Ownership – Some Possibilities
– Dynastic GST Tax-Exempt Trust
– Integrated Charitable Planning: Charitable
Lead Trust
• Intergenerational Transfer
– Gift Tax
– Estate Tax
– GST Tax
• Other Considerations

12. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Edmond M. Ianni
Managing Director
EMI Strategic Capital
Wilmington, Delaware
302.690.7766
© 2014 Edmond M. Ianni. These materials may not, in part or whole, be duplicated, reproduced or distributed in
any way or form without the author’s prior written consent. These materials are for educational purposes only and are
not intended to provide, nor constitute, investment, legal, tax, regulatory or other advice. One appropriately should
consult professional counsel regarding the matters contained herein and their applicability and suitability, if any, to
one’s own individual situation.

13. www.ambar.org/rpte |
The Convergence of Wealth Planning and CIRM: An Overview
by Edmond M. Ianni
Some References
• John J. Hampton, Fundamentals of Enterprise Risk Management: How Top Companies Assess Risk, Manage
Exposures and Seize Opportunities (American Management Association 2009)
• John Fraser and Betty J. Simkins, Enterprise Risk Management (John Wiley & Sons, Inc. 2010)
• Donald H. Chew, editor, Corporate Risk Management (Columbia University Press 2008)
• Edmond M. Ianni, “A Growing Multidisciplinary Practice: Captive Insurance and Wealth Planning,” ABA Business
Law Today (Feb. 2014)
• Edmond M. Ianni, “Family Capital Planning and Captive Risk Management,” Trusts & Estates (Sept. 2010)
• Edmond M. Ianni, “Innovation at Work: Employers Creating Their Own Captive Insurers,” Voluntary Benefits
Magazine (Dec. 2010)
• Robert E. Bertucelli, “The Benefits of Captive Insurance Companies,” Journal of Accountancy (March 2013)
• Edmond M. Ianni, “Strategic Capital Management for the States: Addressing Budget Challenges, Healthcare
Costs and Employee Needs,” Captive.com (2012)