Captive and risk retention group accounting support

Yes to the audit in every domicile checked on 2026-10-19, and the basis depends on the domicile and the captive type. Vermont, Nevada, Utah, Ohio and New Jersey each require an annual audit by an independent CPA, and each sets its own approval step, filing date and basis.

Utah has a captive's annual report prepared using GAAP, with risk retention groups using the NAIC statements (R590-238-4). Ohio requires GAAP unless the superintendent approves statutory accounting in writing. New Jersey prepares its captive annual report form on GAAP unless the department requires statutory. Vermont lets a captive report under GAAP, statutory accounting principles or IFRS, chosen when it applies, and a change needs prior approval. Read the license approval for the basis first, because the chart of accounts, the reserve entries and the audit all follow from it.

For a calendar-year captive, the audited report and the actuarial opinion are both due June 30 in Vermont, Nevada, Utah and New Jersey, and the audit alone is due June 1 in Ohio. The annual report comes earlier, except in Nevada, where it is also due June 30. Each row comes from the state's own page or rule, read on 2026-10-19; fiscal-year captives and approved extensions move the dates.

Extensions are the company's to request; in Nevada the request goes to the Commissioner in writing at least 10 days before the due date.

A pure captive that covers its parent's liability risk books premium written and earned, claims paid and reserved, investment income and operating costs. Everything below is Illustrative, in dollars, with made-up amounts, and your auditor and domicile decide the basis. The policy runs one year from July 1 for a premium of 1,200,000, and the books close December 31 after initial capital of 500,000.

Cash is 500,000 + 1,200,000 - 90,000 + 15,000 - 24,000 = 1,601,000. Liabilities are 600,000 of unearned premium plus 270,000 of unpaid-loss reserves, which is 870,000. Net income is 600,000 earned less 360,000 incurred losses, plus 15,000, less 24,000, which is 231,000, so equity is 731,000, and 870,000 + 731,000 = 1,601,000. Line 5 comes from a credentialed actuary's signed work, not a Finbryn estimate.

Deposit accounting records a contract as a deposit instead of premium and claims when it does not transfer both components of insurance risk. For a captive on statutory accounting, SSAP No. 62R says that "to the extent that a reinsurance agreement does not, despite its form, transfer both components of insurance risk, all or part of the agreement shall be accounted for and reported as deposits" (NAIC Statutory Issue Paper No. 162, finalized 2019-08-03).

For a captive that assumes risk from a fronting carrier, the net consideration received is recorded as a liability, not premium revenue, and adjusted each period by an effective-yield calculation through interest income or expense. The ceding side takes no reduction of its loss reserves. Loss corridors and sliding scale commissions are among the risk-limiting features the paper names. It also records a regulator referral that found some contracts GAAP appeared to keep from qualifying as risk transfer while statutory accounting might not (paragraph 8).

A credentialed actuary and your auditor reach the risk-transfer conclusion. Finbryn tracks the contract terms the analysis needs and books the result.

Yes. The federal Liability Risk Retention Act requires a risk retention group's annual financial statement to be certified by an independent public accountant and to contain an opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist (15 U.S.C. 3902(d)(3)).

States add the mechanics. In Vermont, a risk retention group files its annual statement convention blank, signed jurat page and actuarial certification with the NAIC by March 1, and quarterly statements by May 15, August 15 and November 15 (8 V.S.A. 6007). Regulation C-81-2 sets the Statement of Actuarial Opinion for March 1, signed by the appointed actuary the board names by December 31 of the opinion year. In Nevada, a state-chartered group files audited financials June 1, and NAIC statements March 1, May 15, August 15 and November 15. The group reports on the NAIC property and casualty blank; the NAIC's 2026 instructions say many captive risk retention groups complete it on GAAP and set modifications for them, so confirm the basis with the domicile. See statutory accounting and annual statement support.

The auditor receives a provided-by-client package built from the general ledger, delivered by the captive manager or the captive's officers. It usually holds the trial balance and ledger, bank and investment statements, premium and loss records reconciled to the fronting carrier, reinsurance and fronting agreements, the signed reserve study, intercompany balances with the parent, board minutes and the management representation letter.

Finbryn organizes the ledger-based items and ties them out. The captive manager, the officers and the actuary supply the rest. Finbryn is not a captive manager: Utah defines that role as a firm on its approved list providing accounting, statutory filings and signed annual statements under a written contract (R590-238-3). The diagram marks the three signing steps.

The only regulator-published figures we found are Utah's. The Utah Insurance Department's captive basics page, read 2026-10-19 and undated, estimates the audit and reserve opinion and says costs vary with each captive's size and complexity.

A captive manager under contract, the parent's finance team or an outsourced provider such as Finbryn prepares the financials, always for the officers' review and sign-off. Finbryn's fee is quoted per engagement and no price appears on this page.