If you've been around captives for a while you've undoubtedlyheard someone say “if you've seen one captive, you've seen onecaptive.”

Captive insurance companies (those that are wholly owned andcontrolled by the insureds) are varied, and there are a thousanddifferent paths any one entity can go down when looking at forminga captive. Just think of all the permutations that are possiblewhen it comes to coverages, retentions, limits, reinsurance, typeof captive, type of ownership structure, domicile, service providerselection, stated goal of the captive, related or unrelatedbusiness and so on.

These are “micro” decisions, and it's best to have qualifiedcaptive professionals engaged to assist you when walking throughthe decision processes. But there are also macro decisions entitiesshould be making when contemplating a captive. When consideringthese macro decisions, engaging a captive professional can beuseful but not always necessary.

Senior management buy-in

Probably one of the most important aspects when forming acaptive is to have senior management buy-in; without it, thecaptive will be short-lived. A captive arrangement is a long-termplay, not something your entity should be popping in and outof.

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