| Q |
What is a Reinsurance Captive and
how is it used?
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A:  |
| Q |
Our company accrues about $700,000 in warranty expenses.
Would it make sense to create a captive insurance company
to insure these warranty expenses, and what types of benefits
could we expect to see?
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A: |
| Q |
Can captives be used for coastal property
insurance? |
A: |
| Q |
It is my understanding that industry standard is
to record a Letter of Credit as both an Asset and
an Equity item (when the LOC is used to capitalize
the captive). Is there any authorative guidance, pronouncement, interpretation,
etc. that supports this "industry standard"?
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A: |
| Q |
From an accounting company: What are the major
business processes involved in a captive? Is there an audit
program you are aware of for a captive company? |
A: |
| Q |
What benefit can on-shore holding companies
provide to an off-shore insurance strategy? |
A: |
| Q |
How might construction managers
utilize captives? |
A: |
| Q |
What software is used to file the Annual
Statutory Report? |
A: |
| Q |
In a segregated cell captive, what effect
is there on the rest of the captive if one cell goes insolvent?
In other words, while the other cells are protected since they are
independent of each other, how does the insolvency affect the sponsor
company? Who assumes responsibility for the payment of claims after
the company goes insolvent? |
A: |
| Q |
I work for a P&C carrier and we are considering
the purchase of a "rent-a-captive" domiciled
in Bermuda for our home builder associations. We would then offer
to provide services to various contractor associations
(and their members), thereby giving them all the benefits of insuring
with a captive without the administrative hassles. Is it possible,
or even likely, that such an entity could be a revenue generating
move for the carrier AND a benefit for the association members? |
A: |
| Q |
How do hospital captives assist
physicians with professional liability coverage? |
A: |
| Q |
What is the best on shore domicile to establish
a segregated cell captive? |
A: |
| Q |
For captive management agreements, what specific
service standards do you recommend should be included? (i.e.
report preparation timeliness, turnaround time for emails & voice
mails, processing of transactions, etc.)
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| Q |
How much will a feasibility study
cost -- high/low?
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| Q |
An employer owned captive may insure employee benefits
if a Prohibited Transaction Exemption is first obtained from the Department
of Labor. Is a PTE required if the benefits are written through
a rent-a-captive? Since the rent-a-captive is owned by a
third party and the employer is not a party in interest, one would
think a PTE would not be required.
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A:
2nd Opinion: |
| Q |
What benefits can a captive receive from the fronting
carrier? In, turn what other types of commission can a fronting
carrier get by ceding back to the captive? |
A: |
| Q |
When a front policy is secured by
a letter of credit how can stacking of letters of credit
over several policy years be avoided? |
A: |
| Q |
What is the value of using a front for a
captive over a direct writing risk retention group? I assume
there are tough credit standards from the fronting carrier. Under
that assumption, why have a commercial insured as a partner rather
than write direct? |
A: |
| Q: |
Is it possible to set up a captive with insurance
agencies as the owners, to provide coverage for their own
clients under this captive? What would be some questions
to ask to start this process?
Other replies to this question:
Response #1: Hugh
Rosenbaum (This is a full article on Agency Captives)
Response #2: Gary
Osborne, USA Risk
Response #3: An
anonymous Agency Captive Owner
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A: |
| Q: |
What are the advantages and disadvantages of Risk
Retention Groups vs. Captives? Which one is usually a more
cost effective alternative?
|
A: |
| Q: |
With the rising cost of professional
liability insurance (such as Directors & Officers
Liability, Bankers Professional Liability,
etc) are companies setting up captives for these types of coverages?
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A: |
| Q: |
How long does it take from start to finish
to get a Risk Purchasing Group operational and writing liability
policies? |
A: |
| Q: |
What is the role of the insurance
agent in developing a captive for a client? |
A: |
| Q: |
We are forming a captive to insure our
own entities. Our captive insures a widget company with around $40
mil in revenues and a new widget manufacturing company we are forming.
We want to know if anyone writes "excess" and "umbrella"
insurance for the captive without going through a fronting company?
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A: |
| Q: |
Could you tell us what year Vermont adopted
the requirement for insurers to file a Statement of Actuarial Opinion
on their reserves? |
A: |
| Q: |
What is a sponsored captive? |
A: |
| Q: |
Where can I find information on employee
benefits in captives? |
A: |
| Q: |
Do captives/'off-shore' insurers 'fail'
at a greater rate than domestic (say US) insurers? What is
the percentage of insurers that will fail (incorporate and ultimately
cease writing new premium) in: All US, Bermuda, Cayman, and Vermont?
Could one argue that the savings device that captives employ is
avoiding paying claims through insolvency? |
A: |
| Q: |
Is it possible to form an association
captive or agency captive and sell both property and liability
for home and auto without using a fronting company? |
A: |
| Q: |
Are captives rated? Is there
any way for a lender to determine the claims paying ability of a Captive?
Is there any way to determine a Captive's Policy-holder surplus? |
A: |
| Q: |
What does it take to form an "association
captive" or some sort of entity that can sell employment practices
liability insurance to employers generally? Is that possible?
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A: |
| Q: |
Can you provide further information
regarding Regulation 114 trusts as an alternative to L.O.C.'s?
Is Regulation 114 a Comerica Bank only account or an industry term?
Any assistance you may provide would be greatly appreciated. |
A: |
| Q: |
What do I need to know at the outset
to help a group of physicians in South Carolina (and eventually
other states) set up a Captive or Rent-a-Captive? The goal is to
allow Physicians to manage their insurance risks and reduce taxes. |
A: |
| Q: |
Please explain the difference between
a Protected Cell Company (Segregated Accounts) and a
Rent-a-Captive. |
A: |
