What service providers does a captive need?
Three you will always need, more depending on what you write, one resident director
Fenhua Liu sets a competence and character standard first, then names the core team: a captive manager or consultant, a CPA firm for the annual audit, and an actuary for the feasibility study. Beyond that it depends on the programme, and she lists brokers, claims adjusters, investment advisers, tax advisers, risk managers and industry specialists such as an information technology expert for a cyber book. Providers do not have to be located in Connecticut. The residency requirement lands on the board instead: at least one director must be a Connecticut resident.
Before naming anyone, Liu sets a standard. Providers have to be competent and of good character, which in practice means qualified and reviewable. That framing matters because it is the standard the department applies when it approves people, rather than a checklist of firms.
The core three follow from what a captive has to do every year. A captive manager or consultant runs it, a CPA firm audits it, and an actuary does the feasibility work. Those are not optional for a functioning captive.
Key takeaways
Every Connecticut captive needs a captive manager or consultant, a CPA firm for the annual audit, and an actuary for the feasibility study.
Further providers scale with the programme, from brokers and claims adjusters to a specialist where the risk demands one.
Providers need not be located in Connecticut, but the captive needs at least three board members with at least one Connecticut resident, and officers file biographical affidavits.
The rest depends on the programme. Liu's list is deliberately open: brokers where reinsurance is involved, claims adjusters, investment advisers, tax advisers, risk managers, and a specialist where the risk demands one. Her example is a captive writing cyber, which needs somebody who genuinely understands the exposure.
This is the part an owner tends to underestimate when budgeting. The required three are predictable; the rest scale with how complicated the book is.
From the conversation
Fenhua Liu
Assistant Deputy Commissioner and Director of Captive Insurance, Connecticut Insurance Department
“We look at their background, and we give them approval if they meet the requirement.”
This answer begins at 7:56 of the full conversation. Watch or listen to the whole thing.
Citations
Sources
- Captive Insurance Regulation, Connecticut Insurance Departmenthttps://portal.ct.gov/cid/mission-and-divisions/captive-insurance
The views expressed are those of the featured guest, drawn from a recorded conversation, and reflect their own professional experience. Nothing on this page is insurance, tax, legal, or investment advice. Consult your own advisors about your specific situation.
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