Captive Formation

Initial Analysis and Feasibility Study

A feasibility study analyzes aspects of establishing an insurance company, which may include the following:

  • Identification and classification of insurance risk, and the analysis of different risk transfer solutions, including a captive
  • Overview of a plan to form and manage a captive
  • Summary of insurance coverage’s, premium levels, risk retention amounts, capital and solvency allocation , and financial projections for a captive
  • Fronting arrangements (typically using licensed/admitted carriers) and reinsurance opportunities
  • Discussion of regulatory, accounting, and tax issues

Business Plan

  • Domicile selection
  • Prepare a business plan that will detail the operation of a captive
  • Prepare pro forma financial statement, including balance sheet and income statement


  • Provide a focal point for all service providers
  • Prepare application documents to submit to the insurance regulators
  • Regular communication with regulators to discuss and obtain approval insurance license applications
  • Supervise the incorporation of the captive
  • File the insurance application, provide any requested additional information, and pay the licensing fees



Prepare customized management reports.  Where required:

  • Prepare NAIC filings, or through coordination of services with retained professionals
  • Coordinate annual insurance company audits with outside auditors
  • Prepare and submit annual reports to the insurance regulators


  • Prepare annual tax return
  • Calculate and process quarterly estimated payments
  • Prepare tax extension and related documents

Underwriting and Policy Issuance

Determine premium levels and coverage options

  • Underwrite insurance risks for each insured
  • Coordinate with actuary the ratings methodology
  • Prepare documentation including applications, declaration pages, confirmation of coverage forms, policy forms, insurance binders, premium payment notices, and related documents
  • Review existing insurance documentation
  • Annual underwriting review
  • Coordinate with actuary and other professionals and service providers as required

Regulatory Compliance

  • Review and monitor brokerage, banking and financial statements
  • Quarterly financial review
  • Annual review of compliance with local insurance and corporate legal requirements
  • Periodic review of solvency, capital adequacy and asset allocation requirements
  • Prepare annual compliance reports


  • Claims management
  • Coverage review
  • Coordinate with legal counsel where necessary
  • Coordinate with TPA, where applicable
  • Annual report of claim settlements
  • Assistance with claims reserves and coordination with actuary


Corporate governance, including items such as:

  • Communicate with registered office
  • Communicate with registered agent
  • Preparation of corporate minutes and resolutions
  • Coordinate general corporate law matters and compliance where required



  • Communicate with key outside service providers (under direction of client), including, Auditor, Accountant, Registered Office, Registered Agent, Legal counsel, Investment Advisor
  • Monthly Client Memoranda
  • Regular discussion and updates with clients