Keeping your captive compliant is key in the event of an audit or Internal Revenue Service (IRS) challenge. Making sure that your captive insurance company is bulletproof begins with verifying it is set up for the right reasons. Once set up, your captive should remain compliant with all applicable regulations and laws. This article discusses areas that an active captive insurance company should review frequently to remain compliant and in good shape.
Captive Review (CR): Can you explain the signiﬁ cance of the farm bill on the new hemp industry?
Jeremy Colombik (JC): Many of our founding fathers grew hemp and advocated its uses and beneﬁts, and Thomas Jefferson composed the draft of the Declaration of Independence on hemp paper, but hemp farming was eventually ofﬁcially banned in 1970 with the passage of the Controlled Substances Act in which hemp was included as a Schedule 1 drug, grouping this crop with its twin: marijuana. After almost 30 years of being forbidden, US businesses were once again permitted to import dietary hemp products (seeds, oil) in 2004. The ﬁrst really big win for US farmers came in 2007, when two North Dakota farmers were granted hemp licenses – the ﬁrst time in over 50 years. Continuing that momentum, The 2014 Farm Bill was signed into law, which allowed various universities to research hemp cultivation. This was exciting news for the resurrected hemp industry, but still made it quite difﬁcult for businesses to operate with no access to crop insurance, property and casualty insurance, banking and no legal method of transport across state lines. Additionally, this bill was set to expire in 2019. The signiﬁcance to the 2018 Farm Bill means that all hemp cultivation, processing and operations are now legal across all states and business owners can have easier access to banking, transporting their products across state lines as well as securing insurance for their business.
During 2018, North Carolina's captive insurance program reached a milestone: its fifth anniversary since the inception of the North Carolina Captive Insurance Act. During these last 5 years, the program has seen the substantial growth of North Carolina licensed captive insurers as well as growth of captive managers and other captive services providers that are operating in our state.
Wouldn't it be great if there was a "what to expect" manual filled with must-have information, advice, insight, and tips? In your business, you set goals and have expectations for how things should be running. With a captive insurance company, it is the same situation. Read on for guidance regarding your newly formed Captive Insurance Company.