Originally published in Captive Review, April 2010
Corporate governance issues should be considered before the
decision to set up a captive is made, according to Isaac E Druker
of Anderson Kill & Olick
Governance issues should be factored into the initial decision
to establish a captive and should be revisited systematically and
periodically once the decision to go ahead is made. Similar issues
arise in both the public company and privately owned context, but
the response to those issues will vary as a function of the
different contexts. In the broadest sense, the governance issues
relate to director- and officer-responsibility for appropriate due
diligence and balanced risk-management decisions, at both parent
and captive insurance company level. When the captive is organised,
a significant component of those decisions relates to the selection
and scope of coverages. Thereafter, monitoring of claims handling
under those coverages is crucial, with a view to the
