How It Works
How to Form a Captive Insurance Company
Whether it is to replace or supplement existing third party coverage or provide coverage for risks unavailable in traditional markets, a captive insurance company may be right for your business. When created and managed properly, captive participants can enjoy improved risk management, better cost control, and enhanced cash flow and liquidity. Broad Reach works with a variety of industries to form captives including manufacturing, service providers, retail, construction, healthcare and more.
Starting with Your Needs and Your Situation
The creation and management of a captive directly corresponds to your business needs and risk profile. We lead you through a careful process for creating a viable captive that will deliver exceptional value to you:
Development Phase
- Assemble all information required from all related or relevant parties
- Coordinate the engagement of attorneys, actuaries and accountants
- Review all insurance policies, contracts, financials and agreements in effect
- Identify the potential reinsurance/fronting parties
- Determine Domicile
Feasibility Phase
- Determine Captive Structure/Ownership
- Obtain tax evaluation from tax professional on income tax treatment of the captive transaction
- Assist actuarial firm with development of feasibility study and financial projections
- Negotiate the commitment of fronting and reinsurance terms
Formation and Licensing
- Assist attorneys with the formation of the corporation
- Completion and submission of captive application for approval and issuance of insurance license
- Execution of fronting/reinsurance agreements
- Capitalization
Ongoing Management
- Maintain regulatory compliance
- Provide bookkeeping records in the form of unaudited financial statements
- Assist CPA and auditing firm with data required for production of audited financial statements
- Claims Review
- Coordinate annual meeting of shareholders and directors
- Perform annual renewal underwriting to determine if changes need to be made to the capitve program
We manage the captive on a daily basis, ensuring that it complies with regulatory requirements and provides transparency
