CAPTIVE SOLUTIONS

Captive Insurance Design and Formation

Design and formation

Accurate assessment and analysis

The design and formation of a captive insurance company varies by the complexity of the organization. Accurate assessment and analysis are essential for a cost effective and efficient captive. 

STEP ONE

Feasibility Study

IML will conduct a preliminary feasibility review to access the captive viability in advance of a complete feasibility study. This will involve evaluating a business’s current risk management framework and commercial insurance plan to determine if incorporating a captive insurance company would be suitable for the business’s operations.

Once proper client discovery and the viability of the captive formation is confirmed, a complete feasibility study will be performed inclusive of Financial Analysis, Market Assessment, Risk Assessment, Legal and Regulatory Compliance and Operational evaluation of the proposed captive. The captive feasibility study provides essential information for assessing the benefits and costs of forming a captive insurance company and forms part of the business plan. 

 

STEP TWO

Business Plan

A comprehensive business plan is required by the regulator as part of the application process. IML has extensive knowledge in the preparation and submission of business plans and will guide you through the process. The business plan plays a crucial role in guiding the overall strategy and operations of the insurance company. It provides a roadmap for success and helps outline the company’s goals, objectives, and financial projections.

The feasibility study forms a large part of the business plan and includes Pro forma income statements and balance sheets on a five-year basis, demonstrating the viability of the business plan, and to demonstrate that the applicable Minimum Solvency Margin (MSM) and the Liquidity Ratio (LR) under the Act will be maintained at all times. 

STEP THREE

Insurer Application Process

IML will then proceed with the incorporation and registration of the insurance company which involves the following steps:

Over the years IML has developed strong relationships and works well with industry partners, we are well positioned to advise on selecting professional service providers (including lawyers, auditors, insurance managers, bankers and actuaries, if necessary)

Application will be sent to the Registrar of Companies to reserve the preferred name of the new company (if approved, the name will be reserved for three months)

Bermuda Monetary Authority (BMA)

Application will be sent to the BMA to incorporate the new company and simultaneously we will submit:
(a) the pre-incorporation form for registration as an insurer (including details of ownership, proposed business plan, five -year pro-forma financial projections and company administration); and
(b) an insurance licensing application to the BMA’s Assessment and Licensing Committee

Registrar of Companies (RoC)

Additionally, we will submit an application for registration of a company to the RoC (including the proposed Memorandum of Association, name reservation and applicable annual government fee).

The RoC will proceed with the registration after receiving notice from the BMA that it has consented to the incorporation of the new company.

Once the incorporation and licensing applications are approved, incorporate and capitalise the new company and convene the initial organisational meetings

File final approved licensing documents with the BMA’s Licensing and Authorisations Department for registration and issue of the licence

The BMA issues the new company’s insurance licence

Company commences insurance operations