In this article by Bryan Ridgway for Captive Review, he discusses best practices for establishing a successful captive insurance company. He emphasizes the importance of compliance with state/domicile-imposed regulations, relevant court cases, and IRS safe harbors. He recommends either becoming a captive expert or hiring a qualified captive manager to handle the day-to-day functions and ensure compliance. Choosing an appropriate domicile is also critical, considering factors such as regulatory environment, political stability, tax regime, and perception of the domicile. Continuously reviewing and adjusting captive-issued policies to address changing risks and needs of the business is another best practice. Finally, Ridgway highlights the importance of strategic planning, risk management, and ongoing communication with all stakeholders to ensure the success of a captive insurance company.
Five Best Captive Practices
- Follow proper compliance
- Choose an appropriate domicile
- Review and adjust captive-issued policies
- Stand up to government agencies
- The entire lifecycle of your captive