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Maryland Asset Protection News
Department Licenses State's First Group Captive For Fourteen Of New York’s Major Financial Institutions
Group Captive to Provide Coverage Above Level Provided by Federal Government
Superintendent of Insurance Gregory V. Serio today announced that the State Insurance Department has licensed Customer Asset Protection Company as a captive insurance company in New York insuring the risks of CAPCO Holdings, Inc.
CAPCO Holdings, Inc is owned equally by fourteen financial institutions which include AG Edwards, Inc., The Bank of New York Company, Inc., The Bear Sterns Companies, Inc., Credit Suisse First Boston (USA, Inc.), Edward D. Jones & Company, LLP, The Goldman Sachs Group, Inc., JP Morgan Chase & Co., Legg Mason, Inc., Lehman Brothers Holdings Inc., Morgan Stanley, Raymond James Financial, Inc., Robert W. Baird & Co., FMR Corp. and Wachovia Corporation.
"Customer Asset Protection Company (CAPCO) is the State's first group captive and demonstrates that major financial institutions can cooperate around an insurance mechanism to avail themselves of this vital risk management tool in New York State," said Serio. "The announcement of the first group captive proves that companies are finding solutions to their global insurance needs in New York State. Governor Pataki has made it a priority to continue to meet the needs of the business community and the Captive Law, which allows for the formation of captives, has provided a valuable and more flexible option for companies, like CAPCO Holdings, Inc., to manage their insurance needs and better managing their risk management strategies."
CAPCO will provide a mechanism for these fourteen financial institutions to provide excess insurance for investors in the event they sustain losses as a result of a bankrupt or otherwise financially troubled investment firm. This coverage is designed to be in excess of an initial layer of coverage provided by the federal Securities Investor Protection Corporation (SIPC). This excess coverage, which has been recently made unavailable by the admitted insurance market, is now available through the formation of this group captive insurer.
Prior to 1997, captives were not permitted in New York and had been headquartered in a small number of states or off-shore in jurisdictions such as Bermuda. With the passage of the Governor's Captive program bill in 1997 and the recent creation of the Captive Group at the Insurance Department, businesses are now choosing New York State as an on-shore location for innovative alternative insurance programs such as captives.
Going off-shore with asset protection is becoming very common
Asset Protection can involve utilization of out of country corps., banks, partnerships, ,trusts, funds, management firms, to legally safeguard assets, plan for the future, minimize taxes and get involved in globally investing opportunities.
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Definition:
Holding several investments that have different risks. The concept of "Don't put all your eggs in one basket." The chance that a single stock or other investment will lose money is offset by the chances of your other stocks and investments making money.
Revocable Trust
Definition:
In a living, or revocable trust, you name yourself as the grantor, the trustee, and the current beneficiary. You then transfer some or all of your assets to the trust. The terms of the trust require that the trust is to be used for your benefit during your life. After your death, the living trust continues for the benefit of your intended beneficiaries.
Trustee
Definition:
The person who receives legal title to the assets in the trust but is legally obligated to hold, manage, and invest the trust assets for the benefit of the beneficiaries. The trustee's duties are set by the trust agreement and by law.
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