How do you know if a captive insurance company makes sense for your organization?
Cedar utilizes the services of actuarial firms that are experts in the captive insurance industry. The actuarial analysis is the statistical heart of the feasibility study. Actuaries use standard mathematical and statistical models to project future insurance costs based on past experience. The resulting “loss cost” is the projected cost of paying for losses in the projected year.
In order to conduct this study accurately the following information is needed:
- Current and four prior years of insurance company issued loss runs dated within the last three months for each of the lines of business being considered
- Exposures by line of business for the current and four prior years of operation. This would be any measure of the risk, including payrolls, gross receipts, number of power units, etc.
- Projected exposures for the upcoming year
- Company Financials at the last year end
Captive insurance programs are not cookie-cutter answers to insurance questions. They offer unique solutions designed specifically to meet the needs of the client.
As a part of the feasibility study we meet with the clients and their insurance representative to interview them on their operations, structure and business flow. An understanding of the clients objectives and expectations is critical in designing a successful captive mechanism.
The Business Plan
All the statistical and business analysis comes together in the Business Plan. Presented to the client in a face-to-face meeting the business plan presents the actuarial and business review results in a holistic manner. The efficacy of a captive program is determined from an overall financial and risk management perspective. If a captive program is indicated the business plan is the foundational document to interest industry partners, to participate in supporting the program and regulators to license its operations.
Captive Company Formation and Ongoing Management
Once the decision has been made to utilize a captive insurance mechanism, Cedar Consulting LLC can help you navigate the regulatory waters to license your captive and then provide ongoing company management services.
The key to success in bringing a Captive or Risk Retention Group Business Plan to life is in knowing the steps for execution and having excellent relationships with domicile service providers and regulators. Our experience in forming companies in multiple domiciles has given us the experience and reputation needed to efficiently bring your company to life as well. Cedar Consulting LLC can help to license your captive in any domicile worldwide. We can also perform captive management services domestically and refer offshore domicile management to our affiliate, Citadel Management Bermuda Limited.
Proper captive management requires more than just financial statement preparation.
Your captive manager must stay abreast of the changes to regulations and overall market trends in order to communicate their impact to you as well as provide guidance on how best to improve your captive’s performance. Our staff of professional accounting and insurance specialists collaborate to create strategic goals for your captive and then work diligently to execute the strategies.
We are currently licensed to perform captive management in several domiciles including Montana, New Jersey, North Carolina, Nevada, Tennessee and Utah with new domiciles added as clients require.