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:
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Bookkeeping and Accounting
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Regulatory Filings and Compliance
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Corporate Compliance (board meetings, minute keeping)
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Claims Management
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Coordinating Services of Attorney, CPA, Actuary, Underwriter, and Asset Management Advisor
Captive Attorney’s Responsibilities:
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Drafting forms for all insurance policies issued
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Corporate Resolutions
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Federal Tax Compliance
CPA’s Responsibilities:
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Annual audit of the financial statements
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Annual tax return preparation and filing
Actuary & Underwriter’s Responsibilties:
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Underwrite and price policies annually
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Certify loss reserves annually
Asset Manager’s Responsibilites:
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Develop and adhere to an Investment Policy Statement (IPS)
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Ensure proper allocation of assets to support the captive’s liabilities