Why URMC

Choosing the right risk management strategy can be daunting.

Once you’ve settled on a strategy, who do know who will implement the strategy efficiently, take care of your changing needs, and respond to your requests and concerns? How do you pick the right insurance agent or captive insurance manager? The adage in the captive insurance industry is, “If you’ve seen one captive manager, you’ve seen one captive manager". Insurance experts and captive managers vary in many ways, setting up a wide range of different commercial and captive insurance structures. How does a business-owner choose an insurance agent or captive insurance manager that is best for their situation?

Consider these Factors:

  1. Experience and Education: How much experience does the agent or captive manager have? Do they adopt practices to conform to appropriate industry standards? Is the professional affiliated with any professional associations? Is he or she attending conferences and staying abreast of industry standards?
  2. IRS Relationships: Has the agent had insurance clients audited by the IRS? If so, how many clients? Is there a pattern of frequent IRS client audits, and how have those clients fared? What role will the management firm take in any IRS disputes?
  1. Company and Domicile Concerns: Where does the professional place their business or domicile their captives? Do they use a company that is highly rated, or a domicile that has solid regulatory oversight? Is the domicile respected by the IRS?
  2. Feasibility: Does the manager do a thorough underwriting and feasibility study, using an independent, experienced insurance actuary to determine coverage and premiums?
  3. Number of Clients: How many clients does the professional have?
  4. Professional Advisor Involvement: Does the agent or manager involve the client’s other professional advisors in the risk management decisions, formation and management processes? Does the manager spend time educating the client and the client’s team of professional advisers (tax, financial, legal) on best practices and standards?
  5. Risk Distribution: Does the captive manager employ a legitimate risk distribution strategy that will satisfy the IRS-required risk distribution ruling? How long does the management firm retain the premium in the risk pool? Is there a separate fee for participating in the risk pool? What is their risk pool claims experience?
  1. Fees: Is the agent receiving exorbitant commissions for their insurance programs? Are the captive management fees appropriate? Are there hidden fees? Are they all-inclusive or ala carte?
  2. Service Levels: How often does the agent or manager stay in touch with clients? How responsive are they to claims, investment approvals and regulatory requests? What kinds of documentation and information do they share with clients?
  3. Client Retention: Has the agent or management firm ever had any clients become dissatisfied? What is their retention rate?
  4. How Are They Different: What makes the management firm different from its competitors?
  5. References: Can the agent or captive manager provide references from current clients, as well as CPAs, financial advisers or attorneys they’ve worked with?

Choosing the right insurance agent or captive management company will save you regulatory headaches, keep you on the right side of the tax code and in the long term save you money. Utah Risk Management Consulting has the expertise and connections to ensure you are set up with the very best risk management situation for your business needs.