R&Q
COPING WITH A
CHANGING LANDSCAPE Tim Riddell of R&Q outlines the importance
of employing an effective captive manager and
management strategy, and
examines the run-off option for those captives looking for an exit.
S
ince the Captive Insurance Companies Association (CICA) was founded 40 years ago there have been many changes to the captive landscape, with onshore and offshore domiciles both being created. The latest
development was as recent as 21 February, 2012, with Governor Dannel P Malloy of Connecticut announcing that he proposes establishing a division in the Insurance Department to regulate companies that specialise in captive insurance.
This ever-changing landscape, combined with the wide variety of jurisdictions, makes a domicile-neutral association such as CICA even more important to clients wondering how, where and when to start their captives.
We in the industry all know that the captive insurance product appeals to a very broad spectrum of groups for which insurance is not just ‘nice to have’, but is fundamental to their trade.
In the case of a corporation the two key, and often conflicting, players in this decision-making process are the risk manager and the chief financial officer: the risk manager who attempts to protect himself from the annual renewal stress attack, and the chief financial officer who struggles to build ever more certainty into his budget forecasting.
Risk retention groups, which generally are groups of professionals acting either as sole traders or as part of professional bodies, have differing dynamics. They are becoming ever more exasperated by the annual fluctuations in available insurance coverage and, in particular, with terms, conditions, price and continuity.
For both corporations and risk retention groups the captive product, 86 CICA | Forty years of captive leadership
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