Have you ever started a project, but as you worked your way through it, you found you didn’t have all the resources you needed to finish the job?
Managing an insurance company is a project. You don’t want to set up an insurance company and find out you don’t have all the activities covered by a technically competent insurance management team. Proper insurance management requires at least the following professional skills:
At Venture Captive Management (VCM), we strive to provide you with a “turnkey” structure. That means that we connect all the resources you need for successful insurance company operations. We provide you with the information you need to make solid management decisions about risk funding for your operations.
As an insurance management company, we manage a specific list of activities in house. Whether we create a risk retention group or a captive insurance program, we have licensed, certified professional insurance technicians who can advise you on the risks associated with your business and can craft the policy language to protect that exposure. They manage the day to day functions of your insurance business. We also manage the day-to-day accounting functions of your company. We are hands-on when it comes to knowing when your premiums are paid and what those premiums are used for. We have the information technology to integrate all the information you need to see clearly the whole picture of your insurance company. Finally, we have a specialist whose only job is to make sure your insurance company meets regulatory compliance requirements both on-shore and off-shore.
While these functions are the core of your insurance business, insurance management requires much more. There will be claims in your insurance company. One of the IRS guidelines for whether an alternative risk funding structure is a “real” insurance vehicle is whether or not it pays claims. As insurance managers, we are constantly monitoring our claims administrators to assure that they are:
- adhering to conservative guidelines in paying expenses
- adhering to clients’ guidelines in aggressively defending claims
- accurately recording claims expenses and reserves to report to VCM accounting
Loss control and risk management are critical parts to operating an insurance company and managing claims—as is hiring competent claims counsel. Whether it’s liability, workers’ compensation, administrative procedures or health benefits, competent insurance management dictates that effective risk management is available to supplement owners’ staff. We at VCM are available to assist in contracting with the professionals that can do the job.
High-Level Insurance Management from Venture Captive Management
It is important that audit and actuarial functions be transactions independent from day to day transactions. When actuaries determine rates, it is critical that they be objective in determining the cost associated with the risk. If premiums are too low, the insurance company could become insolvent and negatively impact owners’ operations. If premiums are too high, the insurer is not competitive and too costly to be functional. Similarly, if auditors are not objective in their practices, it negatively impacts the functioning of the insurance company. VCM contracts with approved actuaries and auditors in each venue to meet compliance requirements for allowable practices and procedures.
As insurance managers, we know your relationship with your bank is important. We work closely with your bank to establish an operating account for your insurance company funds. These funds are held by business partners you trust, and you never lose control of the process. As funds grow they will be transferred to an investment advisory account to keep the money working. Insurance company investments must be conservative to make sure that sufficient funds are readily available to pay claims. When funds reach sufficient strength, we will work with owners to develop an investment plan that meets owners’ needs and complies with guidelines in the venue.
Finally, paying taxes is a consequence of making money. Any risk funding structure that pays more than $2.2 million in premium will pay tax on the underwriting profit. We work closely with tax advisors who are insurance specialists. We incorporate the insurance company’s tax strategy with the strategy of the operating company to make sure we are reaching owners’ goals.
It is the intention of VCM to provide impeccable customer service in the management of your captive insurance program. We want to provide you with the resources you need to realize the benefits of the insurance structure in a turnkey approach that takes the worry out of your new profit center.