Captive Services
In a market characterized by unprecedented volatility, risk managers are looking for ways to develop costsaving
and profit-generating alternatives to the conventional commercial insurance market, including the
formation or expansion of captive facilities. The attorneys of Sonnenschein’s Insurance Regulatory Practice
regularly advise on matters related to the development, structure and operation of domestic and off-shore
captive facilities. Our in-depth understanding of state and federal regulatory environments, combined with
our domestic and international insurance industry expertise, allows us to deliver strategic solutions that
address the legal and business issues clients face in today’s unpredictable marketplace, making us the go-to
law firm for captive matters.
Examples of Sonnenschein's Captive Services
- Provide advice during the feasibility study, actuarial study, application and formation of the captive
facility
- Assist in the development of domestic and off-shore captive facilities, including single-parent,
association, industry, group, agency, protected cell, special purpose and rent-a-captive facilities
- Provide assistance in structuring the use of the captive in the most tax-efficient manner
- Assist in identifying the ownership structure, insurance needs and overall goals the captive will address
- Review and negotiate agreements related to captive insurance programs, including agreements with
brokers, third-party administrators and reinsurers
- Assist in determining the amount of premium obligations, the amount of required investment capital and
other resources involved in setting up a captive facility
- Advise regarding methods to reduce the insured’s reliance on the commercial insurance market through
the implementation and/or expansion of existing captive facilities
- Advise regarding accessing reinsurance markets and pooling arrangements
- Advise regarding shifting contingent liabilities from operating units to a captive to prepare subsidiaries
for sale by insuring liabilities
- Advise regarding the transfer of wealth and/or reserves to captive facilities
- Advise regarding diversification of a captive’s operations and conversion of a captive facility into a profit
center by capturing premiums and generating underwriting profits from third parties
- Advise regarding the impact of an insurer insolvency on a captive reinsurance structure, including
negotiation of commutations and other disengagement transactions with financially troubled insurers
and reinsurers
- Negotiate cut-through endorsements for inclusion in captive reinsurance structures
- Advise regarding the application of industrial insured exceptions to captive placements and related
premium tax issues
- Advise regarding strategies for the run-off or transfer of long-tail liabilities to a captive facility
- Advise regarding termination of a captive or captive program and run-off strategies
