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Key considerations for the operation and management of the company must be taken into account during the formation process. GPW’s comprehensive formation services address these considerations. Our services include:

  • Analysis and evaluation of different program options including:

    • Controlled Foreign Corporation (CFC) electing U.S. tax status

    • Non-Controlled Foreign Corporation (NCFC)

    • Dealer Owned Warranty Company (DOWC)

    • Captive

    • Conversion from reinsurance to an onshore or offshore captive program

  • Domicile selection

  • Development of company business plan

  • Assist in formation of company

  • Review of treaties and assistance with negotiation of reinsurance arrangements

  • Tax considerations

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Choice of Program

There are several common programs to choose from when forming a company.


Controlled Foreign Corporation (CFC)

A CFC (re)insurance program is a controlled foreign corporation domiciled in an offshore country. A CFC (re)insurance program typically makes an election under Internal Revenue Code Section 953(d) to be taxed as a U.S. insurance company. The entity is usually owned and controlled by a single producer or producer group to insure or reinsure products sold by the producer or insuring the risks of affiliates–for example, an auto dealer group reinsuring F&I products sold at their dealerships. The company assets are all maintained in U.S. financial institutions, unless an offshore deposit is required by the domicile. However, the premium produced in the program may be subject to premium/procurement taxes. For tax-related information, click the link below.

Non-Controlled Foreign Corporation (NCFC)

An NCFC reinsurance program is a non-controlled foreign corporation domiciled in an offshore country that is owned by at least 11 unaffiliated U.S. participating shareholders or actual foreign owners. The company is typically controlled by the administrator and/or insurance company whose products are reinsured into the NCFC. The participating shareholders own a series of participating stock but do not individually direct the operations of the company or any of the investments. However, the premium produced in the program may be subject to premium/procurement taxes and excise taxes. For tax-related information, click the link below.

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Dealer Owned Warranty Company (DOWC)

A DOWC is an administrative corporation (C Corp) designed to be the obligor for non-insurance F&I products such as VSCs. The company is not regulated as an insurance company, but is treated as an insurance company for federal income tax purposes. The DOWC is owned by a dealer or dealer group and is administered by a third-party provider. The DOWC usually purchases an excess of loss insurance policy from a third-party insurance company to insure its performance under the obligations the DOWC issues. For tax-related information, click the link below.

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A captive (re)insurance company (Captive) is designed to (re)insure the business and related risks of a small (usually related) group of insureds. Captives are typically formed by companies to manage risk. In particular, a captive provides opportunities for insuring risk not available through traditional insurance markets. Within a captive insurance program, business owners can also focus on risk mitigation/controlling claim costs, insure deductibles, and/or obtain insurance more cost effectively. To learn more about captives, click the link below.

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Conversion to Captive

Companies formed as reinsurance companies can also be converted to captives. This allows the owners to enjoy the same opportunities provided within a captive program while still reinsuring their existing products. GPW can facilitate the conversion to a fully licensed captive. To learn more about captives, click the link below.

Domicile Selection

Offshore vs. Onshore

Among the key regulatory issues to be considered in selecting a domicile are the following:

  • Minimum required capital and statutory deposit requirements

  • Licensing and other annual fees

  • Existence and nature of a tax treaty with the United States

  • Restrictions on the type or source of business written

  • Regulatory reporting requirements, such as financial, actuarial, and audit reports

Available Domicile Options:


  • Turks & Caicos

  • Anguilla

  • Bermuda

  • Cayman

  • St. Kitts & Nevis

  • St. Lucia

  • British Virgin Islands

United States (Onshore):

  • Delaware Tribe

  • Many U.S. States: Arizona, Delaware, District of Columbia, Hawaii, South Carolina, & Utah

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