Forming a Captive

The ability to access the reinsurance market allows the captive manager to approach any reinsurer that is acceptable to the fronting company.

Information about forming a captive.

When selecting a captive manager the several issues need to be considered.

With the exception of the largest and most established captives, the majority of captives are managed by third parties that have special expertise in captive management.

Selecting a domicile is a key decision and one that is made at an early stage as regulatory factors will have an impact on how a captive program is put together.

Front companies play a pivotal role in captive programs as they provide the ability to issue insurance policies when captives are precluded through not being licensed.

Captive users have the choice of a single owned approach (pure captives and rent-a-captives) or a group captive approach.

Before forming a captive it is essential to perform a feasibility study to determine whether or not a captive is a viable proposition. Part of the feasibility study involves a review of a company's current insurance program to determine suitability by comparing to what might be achievable under a captive scenario.