# Captive and risk retention group accounting support

Canonical: https://finbryn.com/us/services/insurance-accounting-support/captive-rrg-accounting-support

Finbryn provides accounting support for captive insurers and risk retention groups, keeping the books on the basis the domicile requires and preparing the schedules the independent CPA and the actuary work from. The Utah Insurance Department's captive page, read 2026-10-19, puts the audited report and actuarial opinion due June 30; a credentialed actuary signs any opinion.

A captive is an insurance company, so it carries two jobs at once: a monthly set of books, and a yearly filing package for its domicile's insurance department. Finbryn keeps the books on the basis the domicile approves (GAAP for most captives; a risk retention group files the NAIC blank, which many complete on GAAP and others on statutory accounting), reconciles the bank, investment and fronting-carrier statements, and prepares the schedules behind the annual report your officers verify. The [statutory accounting vs GAAP guide](/guides/statutory-accounting-vs-gaap-for-insurers) explains what changes between the two bases.

Four parties touch the file every year. Your officers swear to the annual report. An independent CPA, approved by the domicile where it requires approval, audits the statements. A credentialed actuary signs the opinion on loss reserves. A captive manager, where the domicile or the parent uses one, assembles and files the package. Finbryn organizes the numbers all four use. Reserve work hands off to [loss reserve studies](/services/actuarial-services/loss-reserve-studies), and a credentialed actuary signs any opinion.

Workpapers organized for your independent auditor. Your officers sign the statutory statements and your appointed actuary signs the actuarial opinion. If Finbryn keeps your books, we refer your audit to an independent CPA practice that is independent of Finbryn. Finbryn is not a captive manager, does not form or license captives, and does not design or market captive structures or tax strategies. A risk retention group that files the NAIC blank gets the same support, described on the [statutory accounting and annual statement](/services/insurance-accounting-support/statutory-accounting-annual-statement-support) page. The ASC 944 side of insurance contracts is in the [IFRS 17 vs LDTI guide](/guides/ifrs-17-vs-ldti-asc-944).

What you get: Monthly books on the basis the domicile approves, with bank, investment and fronting-carrier statements reconciled; Premium, loss and reserve entries posted from carrier statements and the signed reserve study; Annual report schedules and a domicile filing calendar prepared for officer review; A provided-by-client package organized for the independent CPA; Loss data tied to the ledger and organized for the credentialed actuary

Software we work in: QuickBooks Online, NetSuite, Sage Intacct, Microsoft Excel

## Does my captive need an annual CPA audit, and is it GAAP or statutory?

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.

## When are the audited financials and the actuarial opinion due for my captive's domicile?

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.

| Domicile | Annual report | Audited report | Actuarial opinion | Basis |
| --- | --- | --- | --- | --- |
| Vermont | Before March 15 for pure, association, sponsored, industrial and agency captives; before March 1 for other types (8 V.S.A. 6007) | June 30 (Regulation C-81-2) | June 30; risk retention groups March 1, with the Actuarial Opinion Summary March 15 | GAAP, statutory or IFRS, chosen at application |
| Nevada | Business plan and premium tax March 1; annual report June 30 | June 30; state-chartered risk retention groups June 1 (NAC 694C.210) | June 30 | GAAP notes, or another basis the Commissioner approves |
| Utah | Before March 1 | June 30 | June 30 | GAAP; risk retention groups use NAIC statements |
| Ohio | January 1 or within 60 days after (R.C. 3964.07), with the actuarial opinion | June 1 | Filed with the annual statement | GAAP unless the superintendent approves statutory |
| New Jersey | March 1, or 60 days after fiscal year-end | June 30 | June 30 | GAAP unless the department requires statutory |

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.

## What do captive accounting entries look like?

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.

| # | Event | Debit | Credit | Amount |
| --- | --- | --- | --- | ---: |
| 1 | Parent pays the annual premium | Cash | Unearned premium | 1,200,000 |
| 2 | Six of twelve months pass | Unearned premium | Premiums earned | 600,000 |
| 3 | Claims paid | Losses incurred | Cash | 90,000 |
| 4 | Case reserves on open claims | Losses incurred | Reserve for unpaid losses | 110,000 |
| 5 | Incurred but not reported reserve, from the actuary's signed study | Losses incurred | Reserve for unpaid losses | 160,000 |
| 6 | Interest on investments | Cash | Net investment income | 15,000 |
| 7 | Management and audit fees paid | Operating expenses | Cash | 24,000 |

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.

## What is deposit accounting for a captive when risk transfer fails?

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.

## Does a risk retention group need audited financials and an actuarial reserve opinion?

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](/services/insurance-accounting-support/statutory-accounting-annual-statement-support).

## What does a captive manager hand the auditor each year, and where does Finbryn fit?

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.

Diagram: A captive's filing year from close to the June reports. Six steps from the December 31 close to the independent CPA's audit report, with officer, actuary and CPA signing steps marked. Dates vary by domicile.

## How much does a small captive audit cost, and who prepares the financials?

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.

| Item | Utah Insurance Department estimate |
| --- | --- |
| Independent CPA, annual audit | $8,000 to $12,000+ |
| Independent actuary, reserve opinion | $5,000 to $8,000+ |
| Management firm | $30,000 to $40,000+ |
| Ongoing maintenance, total | $60,000 to $80,000 annually |

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.

## The process

1. **Confirm the domicile, basis and calendar**: Read the license approval and the domicile's rule for GAAP or statutory and the filing dates.

2. **Keep the books monthly on that basis**: Post premium, claims, reserves and expenses; reconcile bank, investment and fronting-carrier statements.

3. **Close the year and tie out**: Reconcile premium and loss records to the carrier and intercompany balances to the parent.

4. **Pass the loss data to the credentialed actuary**: Loss runs tied to the ledger go into the reserve study; the actuary signs any opinion.

5. **Prepare the annual report schedules**: Officers review, swear to and file the report.

6. **Organize the auditor's package**: The independent CPA receives the trial balance, statements, agreements and workpapers, and audits.

## Common problems we fix

| The problem | How we fix it |
| --- | --- |
| The fronting carrier's reports arrive in a new layout each quarter | We map each report to ledger accounts once and reconcile the totals to the carrier statement every month. |
| The parent reports under GAAP and the domicile wants statutory | We keep one ledger with a mapping to both bases, so both trial balances come from one close. |
| The reserve study and the ledger show different unpaid losses | We book the amount the credentialed actuary's signed work selects and list the change by accident year for the auditor. |
| The audit date arrives before the loss data is final | We schedule loss runs ahead of the filing calendar; if an extension is needed, the company requests it in writing. |

## By the numbers

| Figure | What it means | Source |
| --- | --- | --- |
| June 30 | Utah due date for a captive's audited financial report and actuarial opinion, calendar year-end | [insurance.utah.gov/captive/research/captives-in-utah-basics](https://insurance.utah.gov/captive/research/captives-in-utah-basics/) (2026-10-19) |
| June 1 | Ohio due date for a captive's audited financial report (R.C. 3964.07) | [codes.ohio.gov/ohio-revised-code/section-3964.07](https://codes.ohio.gov/ohio-revised-code/section-3964.07) (2026-10-19) |
| $8,000 to $12,000+ | Utah Insurance Department estimate for an independent CPA's annual captive audit; the page is undated | [insurance.utah.gov/captive/research/captives-in-utah-basics](https://insurance.utah.gov/captive/research/captives-in-utah-basics/) (2026-10-19) |

Pricing: Scope and fee are quoted per engagement after we see the domicile, the basis, the fronting arrangements and the reserve inputs. Nothing on this page is a price. ([See pricing](https://finbryn.com/us/pricing))

## Glossary

- **Pure captive**: A captive that covers only the risks of its parent and affiliates.

- **Risk retention group**: A liability insurer formed under the federal Liability Risk Retention Act of 1986 to cover its members; it files the NAIC blank.

- **Fronting carrier**: An authorized insurer that issues the policy and cedes the risk to the captive by reinsurance.

- **Domicile**: The state or jurisdiction that approves the captive and sets its filing dates and accounting basis.

- **Statement of Actuarial Opinion**: The actuary's written opinion on loss reserves, signed by a credentialed actuary the domicile accepts.

- **IBNR**: Incurred but not reported: the reserve for claims that have happened but are not yet reported.

- **Deposit accounting**: Recording a contract that does not transfer insurance risk as a deposit, adjusted by an effective yield.

## Frequently asked questions: Captive and risk retention group accounting support

**Q: captive insurance accounting entries**

A: A pure captive books premium to unearned premium and earns it over the policy period, books paid losses and reserves to losses incurred, and adds investment income and costs. The Illustrative example on this page balances. The IBNR line comes from a credentialed actuary's signed work, and the basis comes from the domicile (checked 2026-10-19 for five states).

**Q: captive insurance gaap accounting**

A: Utah has a captive's annual report prepared using GAAP, Ohio requires GAAP unless the superintendent approves statutory, and New Jersey requires GAAP unless the department requires statutory (read 2026-10-19). Vermont lets a captive choose GAAP, statutory accounting or IFRS. The [IFRS 17 vs LDTI guide](/guides/ifrs-17-vs-ldti-asc-944) covers ASC 944 changes.

**Q: auditing captive insurance companies**

A: An independent CPA approved or registered by the domicile audits the statements, evaluates internal controls and issues a letter of qualifications. New Jersey does not treat employees of the parent or its affiliates as independent (instructions read 2026-10-19). If Finbryn keeps your books, we refer your audit to an independent CPA practice that is independent of Finbryn.

**Q: Does my captive need an annual CPA audit, and is it GAAP or statutory?**

A: Yes, in each of the five domiciles checked on 2026-10-19: Vermont, Nevada, Utah, Ohio and New Jersey. The basis is GAAP unless the domicile approves or requires statutory, and risk retention groups file the NAIC blank, many of them on GAAP. Confirm the basis in your license approval first.

**Q: When are audited financials and the actuarial opinion due for my captive's domicile?**

A: For a calendar-year captive, June 30 in Vermont, Nevada, Utah and New Jersey for both, and June 1 in Ohio for the audit. In Nevada a state-chartered risk retention group files audited financials by June 1; in Vermont a risk retention group files its actuarial opinion by March 1. The table on this page cites each source (read 2026-10-19); extensions differ.

**Q: How much does a small captive audit cost, and who prepares the financials?**

A: Utah's Insurance Department publishes estimates for the CPA audit, the reserve opinion and total ongoing costs; the table above shows them, from a page read 2026-10-19 with no date of its own. A captive manager, the parent's finance team or an outsourced provider prepares the financials for officer sign-off. Finbryn quotes per engagement.

**Q: What is deposit accounting for a captive when risk transfer fails?**

A: The contract is recorded as a deposit instead of premium and claims. Under SSAP No. 62R, as set out in NAIC Statutory Issue Paper No. 162 (finalized 2019-08-03), the assuming entity records the net consideration as a liability and adjusts it by an effective yield. A credentialed actuary and your auditor reach the risk-transfer conclusion.

**Q: Does a risk retention group need audited financials and an actuarial reserve opinion?**

A: Yes. 15 U.S.C. 3902(d)(3) requires the annual statement to be certified by an independent public accountant and to carry a reserve opinion from a member of the American Academy of Actuaries or a qualified loss reserve specialist. Vermont sets March 1 for the Statement of Actuarial Opinion, signed by the board's appointed actuary (read 2026-10-19).

Related services:
- [Statutory accounting and annual statement support for small insurers](https://finbryn.com/us/services/insurance-accounting-support/statutory-accounting-annual-statement-support)
- [Loss reserve studies for workers' compensation and liability self-insurance](https://finbryn.com/us/services/actuarial-services/loss-reserve-studies)
- [MGA and program administrator accounting](https://finbryn.com/us/services/insurance-accounting-support/mga-program-administrator-accounting)
- [PBC list management](https://finbryn.com/us/services/audit-compliance-support/pbc-lists)

Industries:
- [Manufacturing](https://finbryn.com/us/industries/manufacturing)
- [Trucking and logistics](https://finbryn.com/us/industries/trucking-logistics)

Related guides:
- [Statutory Accounting vs GAAP for Small Insurers](https://finbryn.com/us/guides/statutory-accounting-vs-gaap-for-insurers)
- [IFRS 17 vs LDTI (ASC 944): Key Differences](https://finbryn.com/us/guides/ifrs-17-vs-ldti-asc-944)

## Sources

1. [Utah Insurance Department, Captives in Utah: Basics](https://insurance.utah.gov/captive/research/captives-in-utah-basics/) (2026-10-19)
2. [Utah Insurance Department, rule analysis for R590-238 Captive Insurance Companies (filed 2025-12-04)](https://insurance.utah.gov/wp-content/uploads/238Amend12-4-2025.pdf) (2026-10-19)
3. [Vermont Statutes, 8 V.S.A. 6007 Reports and statements](https://legislature.vermont.gov/statutes/section/08/141/06007) (2026-10-19)
4. [Vermont Department of Financial Regulation, Regulation C-81-2 (Revised), Captive Insurance Financial Regulation](https://dfr.vermont.gov/sites/finreg/files/regbul/Reg_C-_81_2(Rev.)_eff_06_01_17_Adopted.pdf) (2026-10-19)
5. [Vermont Department of Financial Regulation, annual filing checklist for domestic captives not filing an NAIC statement](https://dfr.vermont.gov/sites/finreg/files/documents/checklist-vermont-domestic-non-naic-filing-requirements-2024_2.pdf) (2026-10-19)
6. [Nevada Division of Insurance, Captive annual reports, fees and taxes](https://doi.nv.gov/captive_insurance/annual_filings/) (2026-10-19)
7. [Nevada Division of Insurance, Captive annual requirements](https://doi.nv.gov/Captive-Insurance/Ongoing-Requirements/) (2026-10-19)
8. [Nevada Administrative Code chapter 694C, NAC 694C.210 Annual audit](https://www.leg.state.nv.us/NAC/NAC-694C.html) (2026-10-19)
9. [Ohio Administrative Code 3901-11-03 (effective November 14, 2024)](https://codes.ohio.gov/ohio-administrative-code/rule-3901-11-03) (2026-10-19)
10. [Ohio Revised Code 3964.07 Annual reports](https://codes.ohio.gov/ohio-revised-code/section-3964.07) (2026-10-19)
11. [New Jersey Department of Banking and Insurance, Captive filing requirements](https://www.nj.gov/dobi/division_insurance/captive/filing.htm) (2026-10-19)
12. [New Jersey Department of Banking and Insurance, Captive annual report form instructions](https://nj.gov/dobi/division_insurance/captive/forms/annualreportinstructions.pdf) (2026-10-19)
13. [15 U.S.C. 3902, Liability Risk Retention Act, risk retention groups](https://www.law.cornell.edu/uscode/text/15/3902) (2026-10-19)
14. [NAIC, Statutory Issue Paper No. 162, Property and Casualty Reinsurance Credit (finalized 2019-08-03)](https://content.naic.org/sites/default/files/inline-files/ip162.pdf) (2026-10-19)
15. [NAIC, 2026 Property/Casualty Annual Statement Instructions (adopted June 2026)](https://content.naic.org/sites/default/files/publication-asi-pua-25.pdf) (2026-10-19)

Reviewed October 2026

[All services in Insurance accounting support](https://finbryn.com/us/services/insurance-accounting-support)

## Contact
- Phone: +1 (312) 313-7376
- Email: hello@finbryn.com
- Booking page: https://finbryn.com/us/book