Community Webinar Captives: The class will begin at the top of the hour. There is no sound at this...

Community Webinarwww.insurancecommunitycenter.com

Captives: •The class will begin at the top of the hour. There is no sound at this time.•This class is being recorded. The recording can be found in the Community at Webinars Archive•You can ask questions at anytime, type them into the chat box.•Check your chat box for links to upcoming classes.•This class is not approved for CE credit.

Some things you should know:

www.InsuranceCommunityUniversity.com

Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions;

and state jurisdiction. The instructional materials provided by The Insurance Community Center and its authors is intended as

a general guideline and any interpretations provided by The Community do not modify or revise insurance policy language. Information which is copyrighted and proprietary to Insurance

Services Office, Inc. (“ISO Material”) is included in this publication. Use of the ISO Material is limited to ISO

Participating Insurers and their Authorized Representatives. The Insurance Community Center assumes neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of

the instructional materials provided. Insight Insurance Consulting

[email protected]@insuranceacommunitycenter.com www.insuranceacommunitycenter.com

Copyright 2012©

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Presents Monthly Webinars Free to Community Members.

Community webinars are archived on the Community homepage under the right hand tab titled: Webinar Archive

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In addition the community has unique business networking opportunities.

Enjoy the Weekly Newsletter on a specific topic with a tip of the week; claim; quiz flash and articles

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One Flat Fee per Office includes Monthly webinars approved for CE many

states Test and Learn Audio Presentations on insurance topics Checklists Power point presentations for client

and/or peer training

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Marjorie L. Segale, AFIS, CISC, RPLU, CIC, CRIS, ACSR, CISR

Insurance Community Center, LLCDirector of Education6


Captive BasicsWhy a client would consider forming

a captiveBroker’s role

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Captive Basics

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A captive insurance company is a company established to insure the risks of organizations affiliated with its owner(s)

Traditionally, a captive insurance company is formed with the permission of regulatory authorities in the insurer's home territory (its domicile)

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www.InsuranceCommunityUniversity.com10



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Initial analysis and completion of a formal feasibility study

Domicile selection and applications including multi-year financial forecasts for the proposed captive

Design and implementation of captive ownership structure

Formation and organization of new corporate entities

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Maintenance of proper corporate records and adherence to good corporate housekeeping

Work with banks to set up new accounts

Underwrite and manuscript insurance policies

Verification of policy pricing with third party underwriters and risk managers

Completion of regulatory filings 26


Payment of regulatory fees Contract with and compensate all

third party consultants Arrange third party reinsurance Arrange reinsurance pooling of risks

otherwise retained by the captive

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Preparation of standard financing documents

Work with lenders to coordinate loans from the captive with the prospective borrower's existing financing

The timeline for this can run from 3-6 months.

The cost runs from $50,000 - $150,000 with a typical 831 (b) formation around $75,000

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Prepare regulatory filings Interacts with Captive’s manager,

IRS or other tax agenciesQuarterly financial statements, bank

reconciliation, monitor loan activitiesRecord maintenancePay All Regulatory and Audit Fees

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Loss Handling/Claims Processing This can be sub-contracted out to third party

administrators for their specific expertise Underwrite and manuscript insurance

policies Verify pricing with 3rd party

underwriters/ risk managers Arrange reinsurance Solvency analysis Loss reserve analysis

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Provide independent 3rd party auditor for the domicile

Work with insured’s CPA and prepare captive’s tax returns

Contract with and Compensate All Third Party Consultants

Update and comply with legislative and regulatory decisions / announcements

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Make yourself a part of the solution team Attend meetings with the client and

Captive team Work with the Captive manager as well

as the actuary team Identify exposures not covered by insurance▪ Necessary or excluded coverage lines▪ Large deductibles

Provide a copy of the insurance coverages

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Hearing that a client is thinking about setting up a Captive can be disconcerting

Does NOT mean that you will lose the account

Any professional Captive manager (usually an attorney) will ALWAYS tell your client that the Captive should not be used to substitute for normal insurance coverages, particularly for smaller companies

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Laurie Infantino [email protected] 714 803 5830

Marjorie Segale [email protected]

m 714 206 9583

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Community Lecture February 9th

5 Hiring Mistakes: Hire the best! The Link is in Your Chat window Now

University CE January 25th. Commercial General

Liability February 8th . Builder’s Risk February 14th . Voluntary Benefits

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Community Webinar Captives: The class will begin at the top of the hour. There is no sound at this...

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