Regardless of the insurance market cycle, the use of captive insurance companies has increased year after year over the past two decades.
What is a Captive Insurance Company?
Captive insurance companies are wholly-owned insurance subsidiaries that provide funding vehicles for their parents’ risks. There are now over 6,000 captive insurers worldwide. Over 80% of Fortune 500 companies employ of some type of captive insurance company arrangement.
Captive Insurance Advantages
The advantages of captives are multiple and can be significant:
- Potential short and long-term cost savings
- Customized employee benefits designs and property & casualty programs
- Enterprise risk financing applications
- Potential financial efficients like tax, cash flow and insurance
Spring is a recognized leader in captive insurance. There is no other firm out there that is as dedicated and flexible with providing you with the right solution from development through implementation. This hard work and thoughtfulness has not gone unnoticed in the captive industry, as Captive Review has named Spring Actuarial firm of the Year, Employee Benefits Specialist of the Year and Captive professional of the Year over the past few years. Further, Spring’s captive team lead, Karin Landry has been named to the Power 50 list on multiple occasions, most recently in the top 10, which designates the top 50 professionals in the captive insurance industry.
Our captive consultants have helped innovate captive funding of employee benefits, from the beginning. We have since helped many other organizations through the Department of Labor (DOL) process. Our strategies have incorporated group life and AD&D insurance, long term disability, retiree medical benefits, pensions, workers’ compensation, medical stop loss, and other liability risks. We have worked with captive’s that have been domiciled both domestically and offshore.
Captive Insurance Consulting and Actuarial Services:
- Determine appropriate coverages for consideration
- Identify preferred domiciles
- Define structure, including financial arrangements and service requirements
- Develop loss projections and financial pro formas
- Facilitate go, no-go decisions
Captive Program Modeling:
- Confirm preferred domicile, coverages and parameters
- Develop program structure, including financial arrangements and service requirements
- Access/coordinate tax opinions
- Complete loss projections including scenario modeling and pro forma financials
- Meet with domicile insurance commissioner to discuss filing
- Develop program submission to captive domicile insurance commissioner
- Submit captive application
- Draft policies and procedures
- Arrange for excess coverage through RFP process (access commercial market)
- Finalize partnership arrangements
Ongoing Captive Administration and Actuarial Support:
- Develop policy forms, necessary filings, service standards and procedures
- Issue policies and provide ongoing administration
- Conduct actuarial reviews of reserves, liabilities and perform certifications
- Develop premium, loss and expense allocation
- Review existing programs and identify areas for expansion- create business plans and financial models to support expansion
- Continually monitor the program success against the initial and changing objectives
Next Step in Determining if Captive Funding is Right for Your Business
Spring is experienced with and regularly assists companies of all sizes with captive solutions. From 10-800,000 employees, we can work with you to find the right fit for your business. Contact us for more information about our captive products and services or to discuss a captive feasibility study.