MANAGEMENT OF THE MANAGEMENT OF THE CAPTIVES OPERATIONSCAPTIVES OPERATIONS
PRESENTED BY:PRESENTED BY:
CHARMAIN AGGARWALCHARMAIN AGGARWAL
BARBARA FAWCITTBARBARA FAWCITT
3 CYCLES OF OPERATIONS3 CYCLES OF OPERATIONS
FISCAL REPORTING CYCLEFISCAL REPORTING CYCLE
UNDERWRITING CYCLEUNDERWRITING CYCLE
MEETING CYCLEMEETING CYCLE
FISCAL REPORTING CYCLEFISCAL REPORTING CYCLE
Financial ReportingFinancial Reporting AuditAudit Tax FilingsTax Filings Regulatory FilingsRegulatory Filings
FISCAL REPORTING CYCLEFISCAL REPORTING CYCLEFINANCIAL REPORTINGFINANCIAL REPORTING
Timing of ReportingTiming of Reporting Monthly, Quarterly, AnnuallyMonthly, Quarterly, Annually
Duties for ReportingDuties for Reporting Co-ordinate and receive recordsCo-ordinate and receive records Prepare management accountsPrepare management accounts
Financials and notesFinancials and notes Working papers and schedulesWorking papers and schedules
Distribute Management AccountsDistribute Management Accounts
FISCAL REPORTING CYCLEFISCAL REPORTING CYCLEAUDITAUDIT
Planning MeetingPlanning Meeting Engagement LetterEngagement Letter ConfirmationsConfirmations Year End Loss RunYear End Loss Run Year End Actuarial ReportYear End Actuarial Report Year End Tax CalculationYear End Tax Calculation Year End Management AccountsYear End Management Accounts Audited StatementsAudited Statements
FISCAL REPORTING CYCLEFISCAL REPORTING CYCLETAX FILINGSTAX FILINGS
Co-ordinate with Tax ConsultantCo-ordinate with Tax Consultant Beware of Filing DeadlinesBeware of Filing Deadlines
Big Penalties if missedBig Penalties if missed Examples of Filings & PaymentsExamples of Filings & Payments
Quarterly Tax DepositsQuarterly Tax Deposits 1120 Income tax returns1120 Income tax returns March 15 1120 filing extensionMarch 15 1120 filing extension 720 FET returns 720 FET returns
FISCAL REPORTING CYCLEFISCAL REPORTING CYCLEREGULATORY FILINGSREGULATORY FILINGS
File Audited StatementsFile Audited Statements Inform filingInform filing Email copy of audited statementsEmail copy of audited statements
Deadline 6 months after Fiscal Year Deadline 6 months after Fiscal Year EndEnd
FISCAL REPORTING CYCLE DECEMBER 31 YEAR ENDFISCAL REPORTING CYCLE DECEMBER 31 YEAR ENDJJAANN
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Quarterly ReportingQuarterly Reporting ►► ►► ►► ►►Audit – Planning MeetingAudit – Planning Meeting ►►Audit – Engagement LetterAudit – Engagement Letter ►►Audit – ConfirmationsAudit – Confirmations ►►Year End Loss RunYear End Loss Run ►►Year End Actuary ReportYear End Actuary Report ►►Year End Tax CalculationYear End Tax Calculation ►►Management Accounts to AuditorManagement Accounts to Auditor ►►Audited StatementsAudited Statements ►►CIMA FilingCIMA Filing ►►
UNDERWRITING CYCLEUNDERWRITING CYCLE
Underwriting period may be different Underwriting period may be different than than
fiscal periodfiscal period RenewalRenewal Loss Runs/Cession statementsLoss Runs/Cession statements PoliciesPolicies Premium collectionPremium collection
UNDERWRITING CYCLEUNDERWRITING CYCLERENEWALRENEWAL
Determination of LimitsDetermination of Limits Board ApprovalBoard Approval
Determination of PremiumDetermination of Premium Actuarial Funding StudyActuarial Funding Study
Reinsurance renewalReinsurance renewal Pricing and Board ApprovalPricing and Board Approval
UNDERWRITING CYCLEUNDERWRITING CYCLELOSS RUNSLOSS RUNS
Provided by a TPA Provided by a TPA annually/quarterlyannually/quarterly
Loss Runs tied to paids in FSLoss Runs tied to paids in FS Year End losses tied to losses in Year End losses tied to losses in
Actuarial ReportActuarial Report Serious Claims Reports to Serious Claims Reports to
ReinsurersReinsurers
UNDERWRITING CYCLEUNDERWRITING CYCLEPOLICIESPOLICIES
Issuance of policies at beginning of Issuance of policies at beginning of underwriting cycleunderwriting cycle Written by brokerWritten by broker Board Approval – executed by Board Approval – executed by
authorized representativeauthorized representative Cover notesCover notes
Receipt of Reinsurance policiesReceipt of Reinsurance policies Reviewed by counsel/broker/managerReviewed by counsel/broker/manager
UNDERWRITING CYCLEUNDERWRITING CYCLEPREMIUMPREMIUM
Premium determined by Actuarial Premium determined by Actuarial Funding StudyFunding Study
Distribution of Premium invoices Distribution of Premium invoices (annual/quarterly/monthly)(annual/quarterly/monthly) Timely collectionTimely collection Investment of incoming premiumInvestment of incoming premium
Consideration of Premium HolidayConsideration of Premium Holiday Timely payment of reinsurance premiumTimely payment of reinsurance premium
Consider if FET payable on premium cededConsider if FET payable on premium ceded
UNDERWRITING CYCLE - OCT 1 TO SEPT 31UNDERWRITING CYCLE - OCT 1 TO SEPT 31
JJAANN
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Determination of Limits/PremiumDetermination of Limits/Premium ►►Reinsurance renewalReinsurance renewal ►►Loss RunsLoss Runs ►► ►► ►► ►►Serious Claims Reports to reinsurersSerious Claims Reports to reinsurers ►► ►► ►► ►►Issuance of Policies/Receipt of Issuance of Policies/Receipt of Reinsurance PoliciesReinsurance Policies ►►Actuarial Funding StudyActuarial Funding Study ►►Premium collectionPremium collection ►► ►► ►► ►►Premium Holiday considerationPremium Holiday consideration ►►Payment of FET on Reinsurance Payment of FET on Reinsurance Premium cededPremium ceded ►►
MEETING CYCLEMEETING CYCLE Governed by the Articles of AssociationGoverned by the Articles of Association
Frequency of Meetings Frequency of Meetings Meeting proceduresMeeting procedures
Manager will coordinateManager will coordinate DatesDates VenueVenue AgendaAgenda Meeting materialsMeeting materials Notices & ProxiesNotices & Proxies Auditor attendanceAuditor attendance
MEETING CYCLEMEETING CYCLETYPES OF MEETINGSTYPES OF MEETINGS
Board of Directors MeetingBoard of Directors Meeting Most Operating decisions and approvals made hereMost Operating decisions and approvals made here Proxy Meetings are acceptable if board can not meetProxy Meetings are acceptable if board can not meet
Annual General Meeting Annual General Meeting (AGM)/Shareholders Meeting (AGM)/Shareholders Meeting Auditor Appointments and Dividend Auditor Appointments and Dividend
approvalsapprovals Committee Meetings Committee Meetings
(Finance/Claims/Executive)(Finance/Claims/Executive) Sub groups created to perform certain Sub groups created to perform certain
tasks/make recommendations to the tasks/make recommendations to the Board of DirectorsBoard of Directors
MEETING CYCLEMEETING CYCLETYPICAL MEETING AGENDATYPICAL MEETING AGENDA
Approval of Prior Meeting MinutesApproval of Prior Meeting Minutes Appointment of Service ProvidersAppointment of Service Providers Approval of Audited Financial Approval of Audited Financial
StatementsStatements Approval of Underwriting Approval of Underwriting
Limits/Premium/ PoliciesLimits/Premium/ Policies Claims reviewClaims review Investment reviewInvestment review Director and Officer appointmentsDirector and Officer appointments
MEETING CYCLEMEETING CYCLETYPICAL MEETING AGENDATYPICAL MEETING AGENDA
Cont.Cont. Risk Management Framework reviewRisk Management Framework review Business Plan reviewBusiness Plan review DividendsDividends Review reinsurers ratingsReview reinsurers ratings Budget ApprovalBudget Approval Legal UpdatesLegal Updates Cayman Islands UpdatesCayman Islands Updates
MEETING CYCLEMEETING CYCLE
JJAANN
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Finance Committee MeetingFinance Committee Meeting ►► ►► ►►Board of Director MeetingsBoard of Director Meetings ►► ►► ►►Annual General MeetingAnnual General Meeting ►►Executive and Claims Committee Executive and Claims Committee MeetingsMeetings ►► ►► ►►Distribute Notices and ProxiesDistribute Notices and Proxies ►► ►► ►► ►► ►► ►►Schedule meeting with RegulatorSchedule meeting with Regulator ►►Auditor attendance at Finance/Board Auditor attendance at Finance/Board MeetingMeeting ►►
CAPTIVE CYCLESCAPTIVE CYCLES
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Fiscal Reporting Cycle Fiscal Reporting Cycle December 31 Year EndDecember 31 Year End ►► ►► ►► ►► ►► ►► ►►
Underwriting Cycle Policy Underwriting Cycle Policy Period Oct 1 to Sept 30Period Oct 1 to Sept 30 ►► ►► ►► ►► ►►
Meeting Cycle based on Cycles Meeting Cycle based on Cycles aboveabove ►► ►► ►► ►► ►► ►► ►► ►► ►►
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