The Path to Captive Ownership

Once you’ve chosen your team of professionals and selected an appropriate domicile, you’re well on your way to captive ownership. Here’s a general outline of what you can expect next:

Formation

  • Risk Assessment of your business performed by an independent third party risk management company
  • Underwriting and Actuarial Review of your business resulting in the development of a Suggested Coverage Summary (including policy pricing), Feasibility Study and Business Plan for your captive
  • Application Package compiled and submitted to the Domicile Regulators
  • Legal formation in the jurisdiction chosen
  • Licensure by the Domicile Regulators (once capitalization requirements have been satisfied)
  • Policies issued and premiums paid to your captive
  • Typical timeline for the formation process is 2-3 months

Operation

Captive Manager’s Responsibilities:

  • Bookkeeping and Accounting

  • Regulatory Filings and Compliance

  • Corporate Compliance (board meetings, minute keeping)

  • Claims Management

  • Coordinating Services of Attorney, CPA, Actuary, Underwriter, and Asset Management Advisor

Captive Attorney’s Responsibilities:

  • Drafting forms for all insurance policies issued

  • Corporate Resolutions

  • Federal Tax Compliance

CPA’s Responsibilities:

  • Annual audit of the financial statements

  • Annual tax return preparation and filing

Actuary & Underwriter’s Responsibilties:

  • Underwrite and price policies annually

  • Certify loss reserves annually

Asset Manager’s Responsibilites:

  • Develop and adhere to an Investment Policy Statement (IPS)

  • Ensure proper allocation of assets to support the captive’s liabilities