As a member of the board of a captive insurance company, you have a responsibility to understand the key concepts that underpin how the captive performs. This second in a series of articles continues this educational process, focusing on the concept of loss development.
Captive insurance company board members have a responsibility to understand the key concepts that underpin how the captive performs. This is the first in a series of articles that explores these concepts, focusing on financial statements and actuarial reports.
One of the most important committees a captive should incorporate into its governance structure is an audit committee. This article presents 6 key audit committee takeaways from a KPMG survey, along with commentary related to captives.
A recent audit by the Office of the Utah State Auditor of a public entity pool located in the state provides a cautionary tale to group captives about the need for strong board governance. We recognize that there are differences in public entity pools and group captives, with the major one being that public entity pools are funded by taxpayer dollars. However, a number of the points raised within the audit concerning how the pool is governed are applicable to group captives as well.
Last week a group of Fortune 100 business leaders including Warren Buffett and Mary Barra released a list of "Commonsense Corporate Governance Principles."
The question of whether a captive insurance company's board of directors should meet in executive session without the captive manager or chief executive being present has always been problematic. As captives have matured and become mainstream, this issue deserves additional analysis.
If your captive domiciliary regulator has not encouraged your captive to have a professional independent director knowledgeable about captive operations and finance, it will probably be doing so in the future.