ALTERNATIVE RISK CONSULTING

Captives – Risk Retention Groups – Trusts

In the past decade, Merlinos has assisted in the formation and operation of more than 200 alternative risk transfer mechanisms, including captives, risk retention groups, self-insurance funds, workers’ compensation trusts.

Our work has occurred in various alternative risk venues including Alabama, Anguilla, Arizona, Barbados, Bermuda, Cayman Islands, Delaware, Hawaii, Kentucky, Nevada, North Carolina, South Carolina, Turks & Caicos Islands, Utah, Vermont, and Washington D.C. 
 
Our formation work typically includes feasibility studies which:

  • Project the historical claims costs for the parent and comparing the projections to benchmark rates charged in the competitive market.
  • Provide recommendations related to excess insurance/reinsurance structures, limits, retentions, and coinsurance percentages.

Our ongoing alternative risk transfer services include:

  • Preparation of loss cost and rate studies for the applicable exposures and proposed coverages.
  • Development of rates, rate structures, and rating rules, including experience rating and retrospective rating plans where applicable.
  • Preparation of financial projections based on the proposed rates, budgeted expenses, and anticipated claims under various scenarios.
  • Assistance with decisions related to the appropriate level of capitalization.
  • Preparation of actuarial information for reinsurance submissions and negotiating with reinsurers.
  • Participation at steering committee meetings.
  • Assistance with development of risk management protocols.
  • Market studies of overall rate levels and rate factors charged by traditional insurers.

Our actuaries are experts at providing advice and support related to providing employee benefits via captive insurance entities.

  • Employee Benefits – Merlinos provides actuarial support for employer groups who are considering using their captive insurance company to reinsure certain employee benefits that are subject to Department of Labor regulation.  We can assist employers in designing the right captive insurance program that meets risk objectives and satisfies any associated DOL requirements with respect to benefit enhancement.
  • Long-Term Disability Reserving – Our actuaries can quantify the actuarial value of long-term disability (LTD) case reserves for captive insurance companies who reinsure group LTD benefits.
  • Medical Stop Loss – Our health actuaries have experience in providing a full range of actuarial services to captive insurance companies who issue medical stop loss coverage.  We can suggest appropriate plan designs and the applicable insurance rates for these insurers that will meet their risk management objectives.
  • Group Medical Captives – We provide actuarial support to employer groups that are sharing their employee benefit risks with employers in a group medical captive.

For More Information

Rosemary Wickham, FCAS, MAAA
rwickham@merlinosinc.com
678.684.4844