Products & Services |

Customized Captive Creations

Another creative solution to meet the needs of our clients - Captive Insurance

The commercial healthcare insurance industry, specifically as it relates to medical malpractice insurance, has been in crisis for almost a decade. Malpractice insurance premiums have skyrocketed as insurance carriers respond to the ever-increasing malpractice jury verdicts and judgments. Many medical professionals are looking for an alternative to meet their liability insurance needs. HealthCare Risk Services, a division of HealthCare Risk Specialists, recognize that the development of Captive Insurance solutions may offer some relief.

Captives can save medical professionals from the unpredictable up and down cycles of the commercial insurance market. A captive insurer is a legal entity formed primarily to insure the risks of one corporate parent or a number of similar corporations thereby contributing to a reduction in its parent's total cost of risk.

Captives can be located onshore or offshore and are typically regulated under special captive legislation. Captives offer the possibility of lower premiums, tax advantages, revenue from premium investments, and the ability to implement risk management programs specific to your organization.

HealthCare Risk Services provides specialized expertise and strategic resources to help create comprehensive, results-oriented solutions for all your risk management needs. HCRS is a leader in the management of healthcare captives. Through the creation of customized strategies that have expanded the role of captive insurers, HCRS has the expertise to design, implement and manage a captive program for your healthcare organization.

Consultation and Design Choosing Key Service Providers Choosing Domicile & Implementation Management

There are four key steps necessary to establish a captive:

Step 1: Consultation and Design

The initial step is to conduct a Needs Analysis to identify parent company's strategic objective and it's tolerance to risk. The outcome of this analysis would result in a detailed summary outlining the following:

• Captive's role
• Structure options
• Financing options and projections
• Initial recommendations for the most appropriate captive domicile
• Regulatory compliance
• Cost/benefit analysis

Step 2: Choosing Key Service Providers

The second step includes several administrative and operational steps that include:

• Recommendation for the selection of the appropriate leaders to act as directors
• Appointment of auditors, bankers, legal representatives, actuaries, etc.
• Claims management teams/third party administrators

At this point in the process, it is evident whether or not Captive formation is the best option for the organization. HCRS professionals work closely with clients on the pros and cons of captive formation enabling them to make informed decisions before investing in this long-term risk management program. HCRS also maintains close working relationships with all of the major reinsurers, many of which have specific business units dedicated to working with alternative insurance facilities such as captives.

Step 3: Choosing Domicile & Implementation

Once you've made the decision to develop a captive, choosing the appropriate location is critical to its success. HCRS will evaluate your organizations business goals and geographic location in conjunction with the potential captive domiciles' infrastructure, tax structures and treaties to assist in selection of proper domiciles. Once domicile is selected, Captive incorporation is carried out and by-laws and policies are documented.

Step 4: Management

Active day-to-day management of the captive is critical to its success. HCRS provides ongoing management services that meet critical insurance as well as accounting and corporate needs, such as:

• Insurance
  • Underwriting
  • Administration of insurance and reinsurance programs
  • Preparation of policies
  • Claims handling and settlement
• Accounting
  • Payment and receipt of premiums
  • Claims and recovery
  • Administration of operating accounts
  • Cash management and investments
• Corporate
  • Maintenance of all records
  • Management reports
  • Financial statements and regulatory reporting
  • Administrative support
  • Coordination of directors & shareholder meetings
  • Marketing

For more information on this and other solutions from HealthCare Risk Services, please call 860-521-8555.