The team at Purpose Captive and Risk provides a wide array of services depending on the needs of the client. We start off with a conversation and once we have all decided that we can provide value, we go to work.

One of the key points for the client to understand is that they do not need any expertise in house to take advantage of alternative risk management strategies; up to, and including, owning and operating a captive insurance company. We act as an outsourced risk manager and we perform all of the tasks to make an alternative risk management program function smoothly.

Phase I

The first thing we do is perform a Phase I assessment of all of the current insurance policies that a client has. In this stage, we give the client an objective assessment of where they stand with regard to risk management. We’ll let the client know where they have holes in their coverage and where they are paying more than they should. Even if this is the only service that we wind up providing, it is well worth the time and expense as we will improve the risk management of virtually any company.

Phase II

After the Phase I is prepared and the written report is given to the client, we are prepared to begin an informed discussion as to whether the client is an appropriate candidate to investigate the use of alternative risk management strategies. Pure captives, cell captives and self insurance are some of the more common strategies that can be employed. With the knowledge of the policies in place and the specifics of the client’s business and learning the goals of the owners, we can determine if we should move to the Phase II assessment. During this Phase, we go out to the alternative risk market and prepare a feasibility study. We engage actuaries and captive managers to give objective guidance regarding the formation of a captive insurance company. This includes an analysis of the risks to be insured, reinsurance options, capitalization requirements, operational plan for the captive, evaluation of the appropriate domicile, overview of relevant tax considerations, analysis of options for entity structure and financial analysis.

Purpos Captive and Risk Services

Phase III

If the decision is made to form a captive, this Phase III is the implementation. The captive manager and actuary are hired. The insurance application is filed with the regulator of the domicile selected. Appropriate reinsurance is obtained. The articles and bylaws for the captive business entity are completed. The client capitalizes the captive. The captive becomes operational.

Phase IV

Once the captive is operational, this Phase IV is the management phase. Handling of claims, monthly accounting, annual captive audit, maintaining compliance in the domicile, tax returns, actuarial reserve analysis and corporate formalities are some of the regular tasks handled. One of the most important functions that Purpose Captive and Risk provides though, is a regular review of the client’s overall risk management. As the client’s company changes, as the insurance markets change, as laws and regulations change, it is very important to constantly be looking for the best ways to handle risk management. Often a client will start with only a couple of policies in the captive, but over the years more and more policies will be put into the captive. In addition, more entrepreneurial opportunities can be explored where a client starts a captive to insure their suppliers or customers.