January 15, 2016
mikee
How do I form a captive insurance company?
There are several steps involved in forming a captive insurance company. These steps may vary slightly depending on the specific jurisdiction in which the captive insurance company is being formed and the type of captive insurance company (e.g., single-parent or group captive) that is being created. Here is a general outline of the steps involved in forming a captive insurance company:
- Determine the purpose and structure of the captive insurance company: You will need to decide what type of risks you want to insure through your captive insurance company and whether you want to create a single-parent or group captive. You will also need to decide on the legal structure of your captive insurance company (e.g., corporation, partnership, trust).
- Choose a domicile: You will need to decide where you want to incorporate your captive insurance company. This is known as the domicile of the captive insurance company. There are several jurisdictions that are popular choices for forming captive insurance companies, such as the Cayman Islands, Bermuda, and Vermont.
- Draft the articles of incorporation and bylaws: You will need to draft the articles of incorporation and bylaws for your captive insurance company. These documents will set out the purpose, powers, and governance structure of your captive insurance company.
- Appoint directors and officers: You will need to appoint directors and officers for your captive insurance company. The directors will be responsible for the overall management of the captive insurance company, and the officers will be responsible for the day-to-day operations.
- Obtain a license: You will need to obtain a license from the regulatory authority in the jurisdiction where you are incorporating your captive insurance company. This will typically require you to submit an application and pay a fee.
- Fund the captive insurance company: You will need to fund your captive insurance company in order to cover the costs of operation and to meet any required capital and surplus requirements. This may involve making a capital contribution or transferring assets to the captive insurance company.
- Appoint service providers: You will need to appoint service providers for your captive insurance company, such as an auditor, an actuary, and a legal counsel. You may also need to appoint a fronting insurer, depending on the specific needs of your captive insurance company.
- Begin underwriting and issuing policies: Once your captive insurance company is fully operational, you can begin underwriting and issuing policies to insure the risks of your business or personal activities.
Categories: Blog
Tags: captive, Workers Comp