Winding up a Captive - Hartwell style.

So you want to wind up your Captive, for whatever reason – you’ve fallen out of love with Captives, you want to move to pastures green, a Captive doesn’t make sense anymore it doesn’t matter, the decision has been made to part company with your Captive arrangements.

At this stage you need to make a decision. Do you want to close everything off and get any accumulated loss fund back or do you want to run the losses off to extinction. That’s not a question that we can answer and you will need to come to that decision after due consultation both with the Captive provider and internally in your company.

"We will work as diligently and as purposefully in winding up your Captive arrangements with us as we did when we set them up originally."

At this stage let me be very clear about the position of Hartwell when it comes to parting company with our clients: we want to be as accommodating as possible. We will work as diligently and as purposefully in winding up your Captive arrangements with us as we did when we set them up originally. There is no desire from our side to prolong the process in the hope that we can squeeze out the last drop of earnings from the account. That’s not how our mind works, that’s not our Corporate culture. We want clients to enjoy a fast and professional onboarding and also we want them to know that if they want to leave quickly that we will facilitate that process with all our strength. We want our clients to be happy, we have no need to extract fees from clients on a lengthy closure process.

So if the decision is to wind up the Cell or Captive involvement as rapidly as possible then we do the following:

1. We thank the client for doing business with us. We assure them that we will work as rapidly as possible to make this happen. We truly appreciate the confidence that the client has placed in us over the years and when the time comes to part we want our clients to know that we still appreciate them and their business.

2. Then we look to clean cut the policy or policies. A Letter will be sent to the client asking them to hold the Captive harmless from future losses or existing loss developments. This effectively freezes the Captive and clean cuts the liabilities. 

3. We send the various notices of cancellation, accounts and history of the Cell with the Clean Cut Letter to the DOI for sign off. 

4. As the Clean Cut Letter removes all existing and future liability from the Cell this should enable the DOI to agree to terminate the cell or the individual client’s participation in that Cell.

5. Upon the DOI agreeing that the Cell’s liabilities have been successfully discharged we can then wind up the Cell and return any accumulated net fund to the client.

The process is easy and should be rapid. The good news is that the function of a Captive is to enable the client to self insure so the winding up process just needs to remove that self insurance aspect from the Cell back to the client and that, when enshrined in the Clean Cut Letter, should allow the DOI to sign off on the winding up of the cell.

"The winding up process doesn’t need to be long and complicated if the client wants to take liabilities back onto their own balance sheet."

The winding up process doesn’t need to be long and complicated if the client wants to take liabilities back onto their own balance sheet. At Hartwell we want to facilitate returning client money to the client and to assist in every aspect of the winding up process. Hartwell is here to make things easy and understandable.

Roland Horton

Nashville, April 2026