Title Slide

JUN 8 – 10, 2015

www.bermudacaptive.bm

GROUP CAPTIVESGROUP CAPTIVES

Group Captives

Speakers:•Carol Frey, Divisional VP, Great American

Insurance Company•Robert Bernatchez, Principal, Brisk Management

Services LLC•Scott Penwell, Partner, Rhoads and Sinon LLP•Geoffrey Gardner, Senior Advisor, PRP Performa Ltd.

Moderator:•Dennis Silvia, President, Cedar Consulting LLC

Herding Cats

Organizing a Group Captive program has been likened to “herding cats”.

Multidiscipline discussion with a focus on:•Vision, from an organizer’s perspective•Practical considerations from a front company’s perspective•Governance from a legal perspective•Asset planning and management from an investment manager’s

perspective

• Customized program design– Reduce cost of risk for participants– Specialized claims handling– Bespoke Loss Control services

• Capital and Letters of Credit

• Plan to reach initial critical mass and maintain growth with best in class participants

Organizer’s Vision

• Transparency and fairness to participating members

• Balancing individual needs with what is in best interest of the group

• Long term flexibility to meet participant’s future needs

• Recouping start up costs

Organizer’s Vision

• Feasibility Analysis– Full submission including currently valued loss runs and

exposure data with actuarial support– Coverage Templates– Member-to-Member Risk sharing plan– Reinsurance types and attachment points

• Commitment on the part of organizer and participants– Volume– Distribution– Patience

Practical Considerations

•Vendor Selection– Loss Control/Risk Management Services– Captive Management– Front Company– Reinsurer

•Tax status…To be or not to be 953(d)

Practical Considerations

•Owned Group Captive versus Segregated Account Structure– Capital vs. Collateral– Startup and Closing captive– Flexibility vs. Sponsor Control

•Tax Considerations

•Documents and Agreements

Governance and Control

•Controlling and Governance– Officers and Directors– Committees– Codes of Conduct– Independent Directors– Dividend Distributions

• Timing• Mutual Agreement

– Membership• New members• Members exiting

Governance and Control

•Selection and evaluation of investment management

•The asset allocation decision– Need for letters of credit linked to investment– Balance dynamic of maximized returns and liquidity/capital

preservation

Asset Planning and Management

•Board of Directors evaluation of investment performance

•Advantages/Disadvantages of bundling asset management with custody and LOC services

Asset Planning and Management

Q&A