Financial Compliance and Regulatory Requirements: How VCM Can Help

When you establish a captive insurance company for your business, the captive must comply with the insurance and financial regulatory requirements in the state or jurisdiction where the company is domiciled from the initial application throughout the captive’s “lifetime.” Every state or jurisdiction is governed by its own insurance laws and regulations, but at their core, those regulations are all designed to protect insurance consumers.

Businesses that decide to establish and operate captive insurance programs are not experts in financial compliance and regulatory requirements. Venture Captive Management can help your company stay on track. financial compliance

Understanding Regulatory Requirements

Individual state and jurisdictional insurance regulations establish requirements for how to start a captive insurance company, rules about funding it, and requirements for ongoing operational compliance. Because insurance companies are also financial institutions, the IRS, state and/or jurisdictional revenue authorites’ tax regulations also must be satisfied.

Of course, these insurance- and tax-specific regulatory requirements are in addition to any other industry requirements and regulations affecting your business, such as OSHA, Department of Health and Human Services (DHHS) rules, Department of Labor (DOL), Environmental Protection Agency (EPA), Securities and Exchange Commission (SEC) and other entities.

For businesses in the health care field that need to comply with HHS requirements for Medicare and Medicaid reimbursement, complying with insurance regulatory and tax compliance requirements becomes even more important.

Annual Audit Process Helps Ensure Financial Compliance

Meeting your captive insurance company’s specific regulatory requirements is your responsibility. At Venture Captive Management, we understand how critical compliance is, and we are committed to helping the captives we manage successfully meet their state and federal regulatory responsibilities.

One of the ways Venture Captive Management ensures financial and regulatory compliance requirements are met is through our annual audit program. We take our fiduciary management responsibility seriously, and are committed to ensuring that the captives we manage are meeting all requirements to be considered insurance structures rather than just being investment structures for the business. We work closely with our clients to provide a value-added audit process that supports our clients’ needs.

Venture Captive Management Can Ease Your Financial Regulatory Compliance Burden

There are many reasons to establish and maintain captive insurance companies rather than turning to traditional insurance channels to meet insurance needs. Captive structures give businesses control over the entire process for their insurance programs, including setting premium amounts and loss reserves. They can also create a profit center in your business, letting your money work for you rather than being a cost center. Meeting the financial compliance and regulatory requirements associated with captive insurance programs is a necessary – and important – part of doing business.

At Venture Captive Management, we are not tax professionals, but we work to help our clients understand when they need to seek advice and guidance from tax experts who understand our clients’ industries and businesses.

To learn more about captives’ regulatory requirements, and to find out how Venture Captive Management helps clients meet those requirements, contact us online or call us at 770.246.8535 today.