captive management

Enterprise Risk Captive Basics Part III – Ongoing Captive Management

Before you launch an enterprise risk captive, make sure you understand what your long-term relationship will be with the captive manager. Find out what is involved in the day-to-day management of a captive, from compliance basics, to planning, and long-term management and get a list of the critical questions you should ask potential captive managers to ensure your long-term investment will be professionally managed.

Due diligence

Before we consider launching an enterprise risk captive on behalf of a potential client, we work closely with them to vet their business and make sure that they are right for a captive. This process has many steps and involves a great deal of research and digging to get an accurate picture of a company’s financial situation. With this information, we’ll insure that a captive is not only a good investment for a company, but that the company meets all the legal, regulatory, and compliance standards required to launch a captive.

Once we agree that the client is appropriate for a captive, our team develops underwriting and creates coverages appropriate for the company. We write up and submit all the necessary applications, financial forms, legal and regulatory compliance data, and work with the client to make sure their board of directors and staff understand the nature of the captive so that we can work with them on ongoing management issues.

When we launch the captive, we hand over to the client copies of all of the licenses, documentation, and paperwork that we’ve created for their captive. We want any questions of integrity – of your captive or our management of it – to be managed with a policy of open door transparency policy of transparency.

And that’s just the beginning.

Managing enterprise risk captives

Once the captive is launched on behalf of the client, it’s our job to provide ongoing management and support to the client. As we’ve increased our level of expertise, we’ve been able to create processes that ensure proper execution on all levels. Our staff works closely with you on an ongoing basis to:

  • Maintain your compliance with all state and federal laws and regulations that impact captives
  • Keep your company up to date on tax codes that impact captives
  • Help your company file all the necessary reporting to state and federal regulatory agencies on quarterly and annual basis, and as needed
  • Provide support if your company is audited
  • Provide quick turnaround – generally within 24 hours – on any paperwork or documentation requested by your company or any requesting agency
  • Work with your company to make updates, additions, or changes to your captive over time
  • Constantly look after compliance issues in every state, on behalf of every client
  • Create, manage, and update the organization policies and procedures that help us manage vast amounts of information about our clients and our industry
  • Take care of details – like off-site backup systems of all your files in case we experience a fire or incident at our facility
  • Hire smart people to manage your captive, and provide them with ongoing training and learning opportunities

We are a partner in your captive for the long term, and our staff is there to make sure your company is compliant. Above all, we’re here to ensure the performance of your captive. We shoulder the responsibility of underwriting and pricing your risk appropriately so that, ultimately, your captive is operating efficiently for you.

As you consider captive managers, use the bullet-points above as a guide for questions you might ask them. What kind of initial documentation do they provide, and how closely will they work with you on an ongoing basis? Ask about their process for answering questions from state and federal regulating agencies quickly, and ask about IRS audits their clients may have experienced in the past – what kind of support did the captive manager provide, and what is their average response time?

Our goal is to create captives that manage risk appropriately for clients and that perform well over a long period of time. As partners in your business, we will be with you every stop of the way. If you’d like to find out more about our process and our service, give us a call.

Read our Enterprise Risk Captive Basics series – Part I is an overview of captive rate structures, and Part II addresses captive loss ratios.