Guernsey panel highlights proportionality and accountability in captive governance
Good governance of captive insurers depends on effective challenge, appropriate board composition and proportionate regulation rather than box-ticking, speakers told delegates at the 2026 Airmic Guernsey conference.
During a panel session entitled “What good governance looks like – regulation and governance that enables, not slows”, moderated by Diane Maxwell, chief executive of Airmic, panellists examined how boards can maintain effective oversight while making use of specialist external providers.
Cleo Curl, group insurance director at Landsec, said effective governance starts with having the right combination of parent-company representatives and independent directors. Boards should focus on discussion and challenge rather than simply reviewing reports, she said, adding that directors should continue asking questions until they understand the issues before them.
Curl stressed that while functions can be outsourced, accountability cannot. She said boards should challenge assumptions, particularly when risk profiles or loss trends change, and ensure that the captive's strategy continues to reflect the needs of the wider business.
Gillian Browning, deputy director general at the Guernsey Financial Services Commission (GFSC), said Guernsey's approach was deliberately risk-based and proportionate. The regulator does not regulate all businesses in the same way, she said, but considers the nature, scale and complexity of each business.
For captives, the GFSC's corporate governance code incorporates proportionality, while directors are expected to maintain their fit-and-proper status and notify the regulator of material changes. Browning said the approach reflected the expectation that professional directors should alert the regulator when problems arise, rather than being subject to constant monitoring.
Elizabeth Carbonaro, regional managing director at WTW, said governance should remain focused on the captive's business, including underwriting, claims and the risks facing the wider group, rather than becoming dominated by regulatory compliance.
Martin Le Pelley, head of risk & compliance at Artex EMEA, said boards retained responsibility when functions were outsourced to insurance managers. Directors needed to oversee and challenge service provision and ensure the captive was moving in the appropriate strategic direction.
The panel also discussed conflicts of interest, with Le Pelley arguing that they were not inherently problematic provided they were identified and managed. He highlighted the role of INEDs in providing balance where parent-company and insurance-manager interests could differ.
Browning said the GFSC had seen no need to add further governance rules for captives since changes made to its corporate governance code around a decade ago. She attributed this in part to the professionalism of Guernsey's INED community and the experience of its insurance managers.
The discussion also highlighted the importance of maintaining captive solvency during periods of financial stress at parent companies. Le Pelley cited instances where captive entities had remained solvent despite their parent companies becoming insolvent, describing this as an example of governance working as intended.
The panellists agreed that effective governance ultimately depends on the right mix of expertise, constructive challenge and clear accountability, rather than simply satisfying regulatory requirements.
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