Lessons from Captive Insurance

Our clients form captive insurance companies to take advantage of a variety of benefits. But ultimately it comes down to risk management and protecting the business. The Captive industry is under scrutiny from a several sources, so it is critical that captives are formed correctly.

Consideration for captive insurance ultimately boils down to a handful of factors:

  1. Is there significant insurable risk in the business? We need to ensure that the captive is issuing legitimate policies covering legitimate risk.
  2. Are the premiums commercially viable? The premiums being paid for these policies must be commercially reasonable and adequate.
  3. Is there an independent actuarial review for the coverages and premiums? To ensure the coverages and premiums are legitimate, Montera uses independent actuarial services to validate the insurance.
  4. Is the company profitable and viable to sustain the captive insurance for a long-term strategy? We want to make sure the company is solid, profitable, and understands the long-term nature of this risk and business management strategy.

If the results of the above concerns are favorable, then captive insurance may be a great strategy to protect your business, and create other significant benefits for your business!

Posted on May 7, 2015 .