CASTLETOWN

CONFIDENCE IN COMPLEX ENVIRONMENTS

CASTLETOWN GROUP IS AN INDEPENDENT PROVIDER OF A RANGE OF INSURANCE AND RISK MANAGEMENT SERVICES TO COMPANIES OPERATING IN ADVANCED AND DEVELOPING GLOBAL ECONOMIES.

Captive Insurance

Castletown Insurance Services provides management services to captive insurance companies tailored to match clients’ risk management and financial ambitions.

Captive insurance offers an alternative risk management strategy whereby a commercial entity forms an authorised insurance company to assume the insurance responsibilities of its parent company and/ or its customers.

Captive insurance companies are capitalised, nominate directors, employ operational managers and must be authorised to conduct insurance business. 

Our experienced team works closely with clients and their intermediaries to ascertain the feasibility of a captive. Once in place the captive becomes an integral part of the client’s insurance programme.

Benefits
Captives are part of a strategic approach to the retention of risk with the following benefits:

  • By retaining risk, underwriting profits otherwise earned by the conventional underwriting markets or commissions allowed by underwriters can be retained in the captive.
  • Access to the wholesale reinsurance markets may provide premium cost savings.
  • Building up resources over time enables greater risk retention to be offered by the captive, reducing conventional insurance premiums.
  • Its flexible ability to carry risk allows the captive to moderate the impact of market cycles.
  • The captive can provide niche covers where the conventional market may not be able to.
  • Greater oversight of losses as a part of the risk management process. 

Services
Castletown Insurance Services offers a full management service that includes: preparation of business plan/ feasibility study, incorporation and licensing, provision of Directors/ Company Secretary, arranging board meetings and providing company secretarial services, underwriting and claims handling, accounting, and compliance services.

Setup Costs

Set up fee £5,000 Usual minimum
Incorporation cost £1,500 Includes duty on first £2,000 of capital
Business Plan Audit £2,500 Estimated
One-off authorisation £2,315 Payable to Isle of Man Financial Services Authority
Government Duty 1.6% Of authorised capital exceeding £2,000. Max £5,000

Annual Costs

Insurance License fee £4,970
Non-executive Director fee £7,000 Estimate per person
Audit fee £7,200 Estimate £6,000 + VAT
Management fee £45,000 Usual minimum
Sundry £500

Management fees are exempt from VAT and can vary depending on the complexity of the insurance programme, claims frequency, the volume of transactions, accounting requirements, and the number of meetings anticipated for the year. Castletown Insurance Services offers a competitive management fee structure that is flexible enough to accommodate the requirements of clients.

Minimum Solvency Margin/Capital Requirements
The Isle of Man’s Solvency and Capital requirements are strategically set to encourage captive owners to select the Isle of Man as a domicile whilst still ensuring the viability of the captive. The Captive must maintain assets that exceed a defined solvency margin at all times and must be sufficient to support business underwriting. 

The minimum solvency requirements are as follows:

Insurer (Class 12) £50,000 plus 10% of net written premium up to £2m and 5% in excess of £2m
Reinsurer (Class 11) £100,000
3rd Party (3-9) £150,000 or 15% of net premium written whichever is greater

The realistic level of capital required will vary, depending on the type business.

 

CONFIDENCE IN COMPLEX ENVIRONMENTS