The Process for Establishing a Captive Insurance Company
According to Mark Sims, president—global business development at Captive Alternatives, LLC, the process for getting a captive insurance company established can be approached by taking the business owner through the underwriting process, just as it would do if it were buying any insurance. This involves gathering information, which is critically important for an independent actuary to determine what risks and premiums a business owner can insure inside its own captive insurance company.
According to Captive Alternatives, LLC, the process involves the following.
- Filling out a risk assessment questionnaire
- Gathering information about all of the business's current and historical commercial insurance policies to determine current coverage levels and identify coverage holes or gaps by reviewing difference in conditions
- Obtaining business financial statements
An underwriter will package all of the above information for actuarial pricing consideration.