Using "clean" documentation is essential when it comes to efficient captive governance, according to a panel of speakers at the Captives & Corporate Insurance Strategies Summit in Toronto, Canada.
The panel said that getting "the facts" in a captive's paper trail correct is the ideal way to do this, and cited the case of Standard Life Assurance Company of Canada as an example of how not to go about it.
After establishing a new branch in Bermuda, Standard Life expected an asset bump of around $1.2 billion but was found by the Tax Court of Canada to have acted incorrectly.
The judge cited mixed-up dates in the signing of a reinsurance treaty and the hiring of an unqualified bookkeeper as examples of Standard Life's mistakes.
One panellist said: "Facts that might look minute at first can come together to create an important problem. All the pieces must line up towards the same goal."
The panel suggested submitting the minutes of board meetings for review as a way to avoid such complications.
