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Captive Insurer Solutions​

A Long-term Disability (LTD) Insurance Solution 

​New federal and Ontario legislation requires LTD benefits to be provided under an insurance contract. Federal legislation imposing this requirement became effective July 1, 2014, and recent amendments to Ontario's Insurance Act will limit provision of LTD benefits to licensed insurers, on passage of regulation.

These new regulatory requirements are extremely problematic where LTD benefits are currently provided under an H&W trust, or otherwise self-insured. Insurance premium costs carry loads, in addition to costs for actuarial funding of LTD reserves, relating to profit margins and distribution costs, and will (initially at least) reflect additional margins for risk relative to self-insured underwriting experience. In one known case, premiums are 70% higher than current actuarial funding requirements.

In a union context, higher premiums relative to collectively bargained rates threaten other benefits, and possibly the economic viability of maintaining a self-administered H&W trust.
A captive insurance company is a solution to largely mitigate the cost increases arising from the LTD insurance requirement. The captive structure provides a regulated insurance wrapper around current underwriting and administration, with a relatively small added cost.

Our Captive Insurer Services:


GH&A offers a full suite of professional advisory services, including:

  • Initial captive feasibility study - review of current underwriting and administration to determine adequacy of funding and claims administration in an insurance context
  • Captive implementation - preparation of captive business plan, incorporation and registration of captive
  • Ongoing regulatory compliance - preparation of annual regulatory and license renewal filings
  • Ongoing captive management services