Today we are joined by Vice President, Scott Stollmeyer, and Account Manager, Giles Hobday, from USA Risk Group. They will be shedding a light in this Q&A on the benefits of your captive manager being independent.
Q1: What makes a captive manager independent, and how is that designation helpful to the captive management process?
The key aspect of being an independent captive manager is that we are not affiliated with another third-party company or service line, USA Risk Group focuses solely on captive management. This allows us to act as an advocate for our clients and give unbiased, objective advice on all aspects of their captive without fear of upsetting a related affiliate or department. We are able to work with any broker, carrier or other service provider as needed by our clients.
Being independent keeps it simple for the client, and for us. We are there to support the client. Being independent allows us to remain focused on our clients’ needs, making sure things are done on time, are accurate, providing strategic guidance that helps their business and allowing us to build trust with our clients. Being a trusted partner is what we strive for and our independence is fundamental to achieving this.
Q2: How would an independent captive manager work with an insurance broker or agency that does not have any internal captive resources?
USA Risk Group works closely with insurance brokers to provide risk management solutions to our mutual clients. We specialize in captive management, meaning that we can provide a comprehensive service as relates to setting up and running a captive. We start by engaging insurance brokers and their clients to understand their exact needs and assist in completing the feasibility and licensing phases of the program. Once the captive is up and running, we handle all day-to-day elements of the captive, allowing the broker to focus on the design and placement of the insurance. By remaining independent from the broker or insurance company ownership, we can ensure we act as an advocate with unbiased perspectives to provide optimal solutions for an organization’s long-term goals.
Q3: How does an independent captive manager compare to an independent captive consultant?
Independent captive consultants are involved in the strategic and advisory side of a captive program, advising on the feasibility, design and implementation of the program including risk analysis, domicile and service provider selection. Consultants can also advise on performance and may be engaged to advise on specific new projects or restructuring of existing programs.
Independent captive managers are involved in the day-to-day management of a captive. It is advisable to involve a captive manager early on in the feasibility and formation process of a captive insurance company as the manager will generally also be responsible for the initial formation and licensing of the captive during inception of the program.
At USA Risk Group we can provide many elements of what a captive insurance consultant would provide. Our in-house insurance specialist and President, Paul Macey, has over 35 years of experience in the insurance business.
Q4: What are some first steps in thinking about a captive structure and domicile?
The starting point for a captive will generally be establishing what the core goals and objectives of the captive will be. Based on these, we can begin considering all elements of how the captive will be structured including ownership of the captive, program design, domicile selection, data collection, actuarial analysis, regulatory considerations, capital requirements, and tax considerations. These will be part of the feasibility analysis of the captive.
For prospective captive owners and program designers, we will schedule a free consultation call to understand the proposed program and talk through the goals and objectives and ask questions regarding the proposed program. Thereafter, we would assist with gathering the required information needed for conducting the feasibility study.
Each element of the feasibility study will involve input from the client and program designer if applicable. Key decisions such as domicile selection and the structure of the insurance program will be based on suitability and preference and the pros and cons of the various options. At USA Risk Group we are experienced with many different and innovative insurance structures and a variety of domiciles so are well-placed to provide guidance on these decisions.
Q5: How does an independent captive manager work with an actuarial firm and other service providers?
As a dedicated captive manager, we handle all day-to-day elements of managing the captive including the coordination of service providers. Actuarial valuations, audited financial statements, tax filings, legal opinions, insurance policies, and corporate secretarial services (depending on the domicile of the captive), these are items needed by a captive insurance company that are generally obtained from service providers engaged by the captive. USA Risk Group acts as a liaison, working closely with service providers to obtain the required documents and services needed for the operation of the captive.
As relates to actuaries, the captive manager will ensure the actuary has the relevant data needed to complete actuarial reports or other projects which the actuary has been engaged to perform. This may include providing answers to any questions that may arise relating to the insurance program, loss information or other information needed for the actuary’s work.
USA Risk Group helps you gain financial control over your insurance and risk management.
Find out more at usarisk.com