Airmic, the UK association for risk managers and insurance buyers, has collaborated with Aon to produce a guide for independent non-executive directors (iNEDs) appointed to the boards of captive insurance companies.
The guide, ‘A Practical Guide for Independent Non-Executive Directors on Captive Boards’, was engineered as a resource for individuals currently serving as directors on captive boards, or considering an appointment in the future.
Additionally, it contains valuable information for captive managers and owners when considering new appointments to the board, and is also relevant for risk managers who want to re-evaluate the effectiveness of their captive’s board and iNEDs.
The topics covered in the guide include: 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 like performance measurement and the development of service level agreements.
Julia Graham, deputy CEO and technical director of Airmic, said the guide suggests a variety of “simple but really important steps that can be taken to ensure captive company board oversight is fit for purpose”.
Graham added: “Captive governance will continue to come under scrutiny as tax authorities maintain a keen interest.”
“However, even without a compelling regulatory reason, this guide makes good business sense as captives grow in sophistication and complexity.”
Ann O’Keeffe, chief risk officer of captive and insurance management at Aon, commented: “A captive board should collectively have a balance of skills, and a broad range of experience, hence an independent director does not necessarily have to have a risk and insurance background, if this skill is already addressed by the board.”