Hint: it has nothing to do with extraordinary rendition and you can find out here:
"That is because the captive insurance scam was systemic. “This was not an isolated case … AIG did that a lot,” a former insurance regulator said, speaking under condition of anonymity. “AIG helped companies set up offshore captive reinsurance companies. AIG would then overcharge on insurance and pay reinsurance premiums to the captives, giving the captive owners tax-free offshore income.”"
Now why would an officer of a publicly traded company knowingly pay more higher than market rate for insurance? Maybe because they personally owned that captive insurance company? But that would make it, in essence, a kickback scheme (and tax-free to boot!) and that would be "wrong".
Via The Big Picture. There is definitely another post needed (coming) regarding this: "Before CDS, there was reinsurance".
- herb the verb's blog
- Login or register to post comments
Front page
Comments
Tax writeoff.
When you use an offshore captive, the insurance premiums are now tax-deductible!