Regulatory trends, evolving risk profiles prompt update to Captive Governance Guide

Published on Wed, 02/08/2023 - 15:10

Airmic published an update to its Captive Governance Guide at Conference, with additional insight on considerations for boards and independent non-executive directors (iNEDs) on cyber, ESG and D&O.

The Guide, produced in partnership with Aon, was originally published in 2019 and is designed as a resource for individuals currently serving as directors on captive boards or considering an appointment in the future.

It should also prove useful for captive owners who are considering the current performance and value of the captive’s board and iNEDs.

“A lot has changed for captives over the past four years,” Julia Graham, Airmic CEO, said. “The hard insurance market has re-emphasised the relevance and value of captives, seeing them grow in premium size and enter new business lines.

“Trends in ESG, cyber and D&O have also presented new challenges and questions for captive boards to get to grips with. We hope this update helps iNEDs to understand this new environment and equips them to ask the right questions and fulfil their governance duties effectively.”

The Guide covers the benefits of an independent view on the board of a captive; what experience to look for; how to go about appointing an iNED; and best practice in areas such as performance measurement and the development of service level agreements, and what iNEDs should consider regarding cyber, ESG and D&O.

It also has insights from iNEDs of captives domiciled in Guernsey, Switzerland and Luxembourg.

“A captive can be a very flexible tool, but they are not always fully utilised,” said Malcolm Cutts-Watson, chairman of RISCS CWC and a Guernsey iNED.

“An independent director should attend with an open mind and their experience can help the captive on its journey and deliver maximum value.”

Download Airmic’s updated Captive Governance Guide here.