Healthcare Risk Specialists | Customized Captive Solutions

Check out the latest Medical Malpratice update on THE SOURCE, a publication of HealthCare Risk Specialists

Call us today for a free quote: 877.505.4277

Quick Premium Indication Sheet - Fill it out here

Products & Services | Customized Captive Creations

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 creative solutions to meet their liability insurance needs.

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.

4 key steps necessary to establish a captive:

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.