Tips for Starting a Captive

Captives, which are alternative insurance companies owned by those they insure, often provide supplemental insurance for risks that are difficult or costly to insure. Like up to 90% of Fortune 500 companies, you may choose to start a captive insurance company to mitigate your risk.

captive insurance


Captives are heavily regulated insurance companies. To start a captive, you must have a risk that you want to shift or share. The captive distributes this risk through the purchase and provision of insurance.

Captive Structures

Your company will choose between many different types of captives. For example, if your company and its affiliates are the only entities insured by the captive, you may set up a single-parent, pure captive. However, groups of entities can join together and open captives to share similar or diverse risks. Your company may even rent a captive if it doesn’t want to incur the initial outlay costs of starting a captive itself.


A feasibility study will identify the scope and purpose of the captive. This study provides the regulator with why the captive is formed and its financial projections, similar to a business plan. Capital requirements and loss assumptions are also included.

Domicile and Management

Select a domicile location that is not heavily regulated and provides support and access. Your location should be politically stable, and the captive costs should be low.

Prior to filling out your application, you should choose an appropriate manager. Your manager should understand your industry, business and location requirements. Any firm you choose to manage your captive should be able to dedicate the time and expertise it needs to provide timely, accurate claims, actuarial and underwriting services.

Managers should be knowledgeable about your domicile selection and have a strong reputation in the industry. Finally, learn about the manager’s fees. You may consider hiring managers temporarily or for a specific case or study to test their abilities.

Creating and monitoring a captive can be challenging and time consuming. Prepare yourself by gaining knowledge about the industry and process and conduct extensive research on your needs, the captive’s feasibility and the management.

A Quick Guide to Bankruptcy

Sometimes, life happens. Maybe you had an unexpected medical emergency that ate up your savings, or perhaps you were laid off and haven’t found a new job yet. Regardless of your reason for needing a bankruptcy Maryland lawyer, it is important to understand the differences between the types of bankruptcy. Although there are many types of bankruptcy, people most often deal with chapters 7, 11, and 13. This quick guide will teach you the differences between them.

Chapter 7

Chapter 7 is considered the most common type of bankruptcy that people file, possibly because it is also the easiest one to handle. In this type of bankruptcy, you may have assets not protected by an exemption, so a trustee can sell them to distribute profits among your creditors. Chapter 7 is best for people individuals or married couples who don’t have a high net worth.

Chapter 11

Chapter 11 allows for the reorganization of your debts, business affairs, and assets. This is typically used for corporations and is considered the most complicated type of bankruptcy. However, it helps companies by allowing them to remain open and operating as they pay off old debts.

Chapter 13

Chapter 13 is sometimes referred to as a wage earner’s plan. This type of bankruptcy allows individuals to use their regular income to create a repayment plan for all of some of their debts. The plan typically takes up to five years to complete and allows most people to keep their necessary assets, such as their home and car.

The hardest part of deciding to file bankruptcy is often getting through all the red tape. Luckily, an experienced bankruptcy attorney can assist you with the process. Seek out one who is experienced with your specific needs, whether that means someone who works with individuals, corporations, or both.