One of the most common admonitions given to prospective and
current captive owners is that a captive must be run like an
insurance company. I'm still not exactly sure what that
means in the context of a captive in the sense that many attributes
of a successful and well-run captive bear little resemblance to a
large traditional insurance company. There is one attribute of
running like an insurance company, however, that I think many
captives do fall short on. That is, taking a hard, sober look at
the many assumptions made in the initial feasibility study after
three to five years, and every few years thereafter, and
readjusting the captive's priorities based on those
assumptions. It is quite natural, when any business operating unit
does better than projected, to not look the gift horse too closely
in the mouth.
