Formation Management and Domiciles

In an effort to gain greater control over risk in a constantly evolving corporate and regulatory environment and a global marketplace sometimes fraught with volatility, today's successful organizations look for proactive, robust risk management programs that support their strategic objectives, mitigate rising exposures and continuously probe for emerging threats. Through effective levels of control, businesses can achieve stability in turbulent markets, grasp opportunities when they arise, and grow profitably throughout the market cycle.

A central component of risk control strategies for a growing number of organizations is the captive insurance company. A captive is an ideal mechanism for establishing a centralized risk framework; creating tailored, comprehensive and responsive insurance coverage; improving claims handling and monitoring; and potentially reducing the overall cost of risk through enhancing overall risk control.

Captive formation.

Forming a captive, however, is not for everyone and requires the experience and expertise of a captive specialist, especially at the onset, to help a client decide whether their business is a good candidate for a captive solution. At Artex, we take a detailed look at every stage in the captive insurance process – from establishing the viability of a captive option for a client through setting up and managing the company.

We'll conduct a feasibility study of a company's risk profile, which includes actuarial reports, investment models, insurance market conditions and an assessment of regulatory, legal and tax issues. This study allows us to recommend risk management options for the client and establishes whether or not a captive makes sense for the organization. Components of this study will become a part of the insurance application for the selected captive domicile.

Once the feasibility study is completed, we will make our recommendations and begin the process of setting up the captive or cell company. The captive formation procedures will vary based on the complexity of the requirements of the parent organization, the type of structure being set up and the regulatory framework of the chosen domicile. Artex has the experience clients require in establishing, registering and licensing the structure. We will work closely with the client, broker and the regulatory authority to complete all necessary documentation and submit all required information, which typically includes a detailed business plan.

We will assist with the selection and hiring of service providers, including actuaries, attorneys, financial institutions, investment managers, claims administrators, auditors and tax professionals; negotiate arrangements for fronting and (re)insurance; handle license applications; and execute agreements.

Ongoing captive management.

Artex is committed to ensuring the solution we have implemented provides positive results for clients. This means helping to ensure the new captive capitalizes on the full extent of the benefits it has available. Our day-to-day captive management services include:

• Regulatory liaison and ongoing compliance
• Corporate governance services
• Accounting and financial reporting
• Coordination of third-party service providers
• Maintenance of captive insurance policies and premiums

We also want to ensure that the captive continuously evolves to meet the organization's needs throughout its lifecycle. Our staff will work in partnership with the client's senior management so that any changes in the operational or risk profile of the firm, or fluctuations in rates in the commercial insurance market, are reflected in the structure of the captive. To this end, we plan and participate in shareholder and board of director meetings, review operations and coverages with the client and work with the broker to source new lines of coverage, among other important services. We also perform a captive health check to assess the captive's performance relative to its original operational objectives.

Domicile selection.

From an international network of offices, our highly skilled captive formation specialists combine international expertise with local market insight to form all types of captive structures in any domicile where the required legislation exists. Moreover, our independence ensures that the choice of domicile will always be based around the specific demands of the client. When selecting a domicile we look at several factors including regulatory environment, infrastructure, perception, geographic location, tax implications and operation costs.