Healthcare captives
increased funding needed. Organizations operating captives quickly realize this brand of insurance is not the same as a monthly payment to a commercial provider—money that they will never see again.
Like commercial insurance payments, captive premiums come out of the pockets of the organization, but the organization has the opportunity Captive insurance puts the power to tailor and customize insurance policies in the hands of an organization.
Asset protection
With the savings potential, organizations have a greater capacity to facilitate non-traditional risks. Cyber security risk, major customer loss, earthquake (outside major fault zones) and regulatory changes are examples of non- traditional risks with circumstances that do not occur with a great amount of frequency. However, when they do occur, the results can be catastrophic.
Due to the low likelihood of these types of claims, captive insurance
coverage for these and other boutique risks create opportunities for organizations to retain more of their cash within the organization’s control.
Wealth transfer
opportunity for wealth transfer, which can also be viewed as another form of asset protection. When the captive is owned by a trust, wealth transfer can take place when an exit strategy comes into play as the provide an avenue for the surplus held in the captive to be transferred to
TAKING THE FIRST STEPS
is securing the involvement of a captive manager on the front end who success of a captive platform. When conducting your search, a good establishing captives with entities that are similar to your organization. It is also important to secure a captive manager who has experience operating within the state or domicile that the organization has chosen.
that can support a long-term strategy as opposed to a short-term goal.
premiums as well as the potential to build savings that become reserves insurance is very much a risk-reward scenario. If your organization is able to manage the risk, you can reap the rewards.
74 | HEALTHCARE RISK MANAGEMENT REVIEW | Annual 2014
“Without a focus on reducing potential claims to the lowest levels, organizations could see a reduction in available assets due to claims coverage.”
ABOUT RENEE FORD
Renee Ford is a principal in Decosimo’s assurance practice and has more than 24 years of experience in public accounting in both assurance and taxation. She practices primarily in the area of and accounting standards with emphasis on investment entities, captive insurance companies and healthcare. Ford is the primary in International Financial Reporting Standards (IFRS) to enhance her expertise in the international market. Ford has experience assisting captive insurance companies and has served captives and captive managers ranging in size from $100,000 to over $500 million in total assets. She applies her assurance experience to these companies by conducting audits and providing advice on governance, accounting and compliance issues.
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