Corporate governance is critically important for captive insurance companies, as well as the managers and other service providers the captive employs. It’s the captive’s owner, though, that bears the ultimate responsibility for governance.
“At the end of the day, it’s the owners of the captive who are responsible to the regulators in some way, shape, or form in all aspects of the captive insurance business,” said Kevin Doherty, partner at Dickinson Wright PLLC. “The owner ultimately is responsible for a regulated insurance company and for all compliance of any sort with regard to the captive.”
Mr. Doherty made his remarks during a webinar titled “Governance, Oversight, and the Role of the Captive Owner and Service Providers,” part of the Captive Insurance Companies Association “Building on the Best” 2020 Webinar Series.
“Regulators have one responsibility and that’s to regulate the captive. We don’t regulate the service providers and certainly not the captive manager,” said Michael Corbett, senior vice president at Pinnacle Bank and former director of captive insurance in Tennessee.
Mr. Corbett set out five primary responsibilities for captive insurance company owners.