Once a captive insurance company is formed and licensed, the captive owner must now turn its attention to actually running the captive. Although stated several times before, it bears repeating here: a captive is an insurance company and it must be operated as such. As daunting as that may sound initially, you either have heard or will hear from captive industry consultants that managing a captive is not terribly challenging provided you have the right support team in place. While I believe that is essentially true, I also believe you should clearly understand all the requirements before you turn over the management responsibility to anyone. I believe it is a big mistake to outsource something simply because you do not understand it. You should first understand each component’s role in the captive operation well enough to ask the right questions; then secure a resource expert in managing that function. So the first step in the process is to learn the responsibilities of each captive-management function. In order to delegate the responsibilities you must know what they are. Second, no matter what partners are retained to provide management support, you are still ultimately responsible for the regulatory compliance of the captive.   Read more…