Selecting the Captive Manager

6.1. Is the captive manager established with a sound reputation?

It is important to determine how long the captive manager has been in business and how many clients they have.

6.2. Does it have the expertise in the type of captive being formed?

Different types of captive require different expertise as regulations can vary according to the type of captive.

6.3. Is it sited in the chosen domicile?

Local knowledge is essential, especially in offshore domiciles.

6.4. Does it have adequate resources to handle additional business?

Insurance business can require a large volume of transactions and a captive manger must have adequate resources to execute them in a timely and efficient fashion.

6.5. Can it provide access to other service providers if required?

Captive managers will often have established relationships with other service providers such as legal council accountants and investment managers. It can often be advantageous to take advantage of existing working relationships where both parties are comfortable dealing with each other.

6.6. Does it have any experience in the type of business that the captive is insuring?

Depending on to what extent the captive manager is to get involved with the underwriting and claims aspects of the captive program a knowledge of the class of business being written by the captive is important.

6.7. What functions can it perform?

It is important to ensure that the captive manager can provide all the services expected by the captive user and which are not being outsourced to other service providers.

6.8. How will it be compensated?

Annual captive management fees can be in the region of $30,000 - $75,000 for single parent captives and $50,000 - $250,000 for group captives, depending on the volume of business going through the captive and the services being performed.