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Jim Niland

Phone: 716-675-2100 ext.120
Email: [email protected]

With over 20 years of experience developing and structuring Captives, Risk Retention Groups, self-insured Workers Compensation and Healthcare programs,  Aebly & Associates can assist your company with exploring the most advantageous risk transfer program for your needs. When we look at your insurance program we look at it from the point of view of all of the various alternative market solutions available, factoring in your goals and objectives and recommending a long term strategy that meets your needs. Captives and other types of alternative vehicles have evolved from programs only used by Fortune 500 companies to being used by businesses of various sizes that want to take control of their risk transfer programs.

An alternative risk transfer program has the following benefits:

Tailor coverages and policy language that fits your unique risk management needs, not an “off the shelf” program sold by insurance carriers. Secure coverage, terms and conditions that are not available or unacceptably priced in the retail insurance markets.

With direct access to the reinsurance market, you will be insuring your risks at wholesale versus retail rates. Additionally, your premiums will be based on your own claims experience versus industry pricing and trends in the commercial market. Your costs will also be reduced by eliminating broker and agent commissions, carrier overhead and profit which can account for 35% to 45% of the premiums you’re currently paying. 

Better management and more control over the claims process, from selection of the claims management firm, and defense counsel, to participation in defense strategies. Less red tape means the entire claims process is less bureaucratic and adversarial than the traditional carrier method. These programs can offer additional estate planning tools for the family owned businesses. 

Premiums paid into a captive can be invested and the investment income accrues to the benefit of the captive owners. Underwriting profit enhances surplus and the financial strength of the captive. 

Properly structured captives receive premium which is tax deductible to the insured business. For closely held multi-generational family businesses, the captive can be owned by the children or heirs to the business. This effectively transfers wealth from the insured business, in the form of a premium payment, to the estate of the children or heirs without the imposition of estate taxes or erosion of the estate’s unified credit amount. The risk management benefits of a captive are primary; however their tax advantages are also very important. 

Captives created under IRC section 831(b) can receive up to $1.2 million in premiums each year tax free, owing taxes only on its investment income. Insurance profit distributions from an 831(b) captive are only taxed when they are actually distributed as qualified dividends, and at the dividend income tax rate, which is less than the much higher federal tax rate on ordinary income. The “tax deferral” feature of captives provides substantial tax planning options, especially if the tax rate on ordinary income, dividends and long-term capital gains change in the future. Additionally, if a captive owner retires to a state with lower or no state income tax, they can substantially reduce or even eliminate state taxes on dividends or long-term capital gains distributions received from their captive.

Through the proper use of conservative underwriting techniques and access to the lower cost reinsurance markets, your captive can build long-term capital surpluses. These surpluses allow you to increase your captive’s capacity for risk, thus further lowering your overall insurance cost basis. 

A captive has the ability to underwrite unrelated risks. If the opportunity presents itself and the unrelated risk is conservatively underwritten, the captive has the opportunity to generate an underwriting profit. 



We offer complete turnkey services from reviewing your current program, analyzing claims and risk drivers, recommending an alternative solution, placing services out to bid such as loss control, captive management, actuarial and other services, and seeing through the initial set up and ongoing operation of your program. We make the process simple so you can concentrate on your business and leave the heavy lifting to us.


With our experience in both the fully insured and alternative market, you’ll have one set of very trained eyes looking at all the options and providing you with solutions that have your best interest in mind, not the interest of the carrier, broker or other party who may not be aligned with your goals and objectives.

  • Single Parent Captives
  • Group Captives
  • Employee Benefit Captives
  • Rent-a-Captives
  • Risk Retention Groups
  • Self-Funded Arrangements

All of the above have a place in the market and they all can help clients meet different objectives. Our job is to sort through the options and advise you on a course of action that helps you control risk and ultimately provide the lowest cost for your risk transfer program.

Approximately 50% of the total in-force insurance marketplace is considered to be written in the alternative market. The reason for this is simple; for the right client, it could be the best long-term risk management program you have ever participated in.

When evaluating whether captive insurance is right for you, ask the following questions:

  1.  Is my company financially stable?
  2.  Does my company have a good loss history?
  3.  Can  my company fund the initial investment and ongoing operation costs?
  4. Does my company have uninsured or underinsured risks?
  5. Does my company spend in excess of $1 million in workers’ compensation, auto and general liability insurance?
  6. Does my company have 100 or more employees on its health insurance plan?
  7. Does my company sell a product that has a warranty, or sell someone else’s warranty that could benefit from reinsurance?

Thank you for the opportunity to allow us to assess your options.