Verve and Michael Maglaras & Company Introduce New 831(b) Defense Coverage

Verve Risk Services Ltd., a London-based managing general agent (MGA) specializing in captive insurance products, has partnered with Michael Maglaras & Company to launch an innovative insurance program that provides defense cost coverage for captive insurance companies formed under section 831(b) of the US Internal Revenue Code.

This newly introduced underwriting program, named the "Micro-Captive Defender," offers a novel solution for captive insurance companies electing 831(b) status, focusing on defense costs, including fines and penalties, related to Internal Revenue Service (IRS) investigations.

"Utilizing our new 'Verve Aura' Portal, we've developed a quick and convenient way for captive managers and captive owners to apply for defense cost coverage," said Scott Simmons, Verve director and lead underwriter for the program. "[This includes] coverage for fines and penalties related to IRS investigations arising from 831(b) status."

Michael Maglaras, principal of Michael Maglaras & Company, highlighted the program's importance in addressing the often-overlooked compliant captives. "Too many stories have hit the trade press about the abuses of the 831(b) structure, and not enough has been written about the many moderate-sized captives electing 831(b) status which do it right, observe the rules, and offer genuine risk transfer in a documented and supportive way," Mr. Maglaras said.

He continued, "Scott and I agree that the London marketplace, a marketplace filled with innovation and continuous support for captives, is the right place for this new underwriting program, and I'm gratified that this program will be provided on Lloyd's paper."

The "Verve Aura" Portal ensures secure data entry and enables a rapid binding and policy issuance process. "With a low entry-point minimum premium, this will prove to be of value to the middle market captive seeking to round out its portfolio of financial protections while obtaining coverage for reasonable defense costs if the IRS launches an investigation into the history and practices of your 831(b)," Mr. Simmons noted.

For more information on the Micro-Captive Defender program, visit the Verve website or contact Mr. Simmons via email.