The idea of forming a captive insurance company, renting a captive owned by others, or in general assessing whether significant accrued and funded risk should be maintained, requires what we refer to in the business as the three “D’s”…Data, Diligence, and Determination.
Testing feasibility, however, is not an esoteric, complicated, or arcane exercise. Rather, it is an exercise in the examination of the size of an existing insurance portfolio, the past claims history within that portfolio, and the organization’s ability to retain risk. It is also never and should never become an exercise aimed at the avoidance of paying appropriate tax or creating what is essentially a fictional insurance transaction. Lastly, contrary to conventional wisdom, there is no “natural” domicile for any class of business underwritten through a captive, such as medical professional liability: well-financed and correctly formed captives are welcomed in all domiciles and by all forward-thinking regulators.
At Michael Maglaras & Company we organize and manage the process of testing captive feasibility. With the assistance of outsourced actuarial work product, we help our clients determine how much risk to take, when to take it, and what support and ancillary services are needed to create adequate infrastructure and to deliver top-flight claims management and risk reduction services.
We have been doing this for more than 35 years. In the health care liability space, Michael Maglaras & Company is the premiere firm of its kind in the world. Our clients will attest to this, and our results are proven.