Tuesday, May 21, 2024

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Airmic updates Captive Governance guide for iNEDs

A rapidly changing captive environment, driven by regulatory trends and greater utilisation due to the hard market, has prompted Airmic to update its Captive Governance Guide, primarily targeted at independent non-executive directors (iNEDs).

The UK’s risk management association originally published the guide in 2019, in partnership with Aon Captive & Insurance Management, as a useful resource for existing and prospective iNEDs, as well as captive managers and captive owners.

The update was announced at the Airmic Conference in Manchester today, and includes additional sections on cyber, ESG and D&O.

“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.”

As well as input from Aon, the updated Guide includes contributions from iNEDs Kate Storey and Malcolm Cutts-Watson in Guernsey, Andrew Bradley in Switzerland, and Francoise Carli in Luxembourg.

It also has a new section containing information for independent directors concerning their own directors and officers insurance.

“For iNEDs, it is important to ensure appropriate directors’ and officers’ (D&O) insurance has been bought, either by the captive itself or, more commonly, by the corporate group with the policy including coverage for the captive’s directors,” the Guide states.

“A certificate of insurance should be provided confirming level of cover, level of the deductible and who covers it, and the name of the D&O insurer. This should be confirmed annually.

“iNEDs should always ask and ensure, where possible, that they are afforded the same level of D&O cover and protection as other board members.”

Download and read the full Captive Governance Guide on the Airmic website here.