An Actuarial Perspective on Captive Feasibility

June 25, 2018

In the captive feasibility study, according to Rob Walling, principal and consulting actuary with Pinnacle Actuarial Resources, Inc., a business or group of businesses may be investigating forming a captive insurance company. One of the first steps of that process is to engage an actuary. The actuary works in partnership with the insured and the captive manager to design the program, coverages, limits, and retention and various other aspects. More importantly, the actuary develops the funding study that provides the premium estimate for the captive upon formation. This gives the captive owner the opportunity to determine whether a captive will work for the owner and make a determination as to whether or not the owner wants to form and operate a captive. The funding study ultimately leads to pro forma financial statements that become the core of the captive insurer's application to the captive domicile.


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June 25, 2018