ORLANDO, Fla.—The Captive Insurance Cos. Assn. has produced a set of best practices guidelines aimed at helping captive insurance company owners and prospective owners launch and maintain their captives.

At this year's annual CICA International Conference in Orlando, Fla., the organization released its second volume of guidelines, focused on utilizing service providers.

The guidelines highlight the four phases of a captive's life cycle: prefeasibility, feasibility and formation, management, and closing. The advisory committee that developed the guidelines “tried to outline who played what role in each of the phases,” said Karin J. Landry, managing partner of Spring Consulting Group L.L.C. in Boston, who chaired the best practices committee.

“What we wanted to do was have the captive owners be the drivers along with the regulators,” Ms. Landry said during a panel discussing the guidelines at this year's CICA conference.

The guidelines include a processes-and-controls checklist about which service provider—captive manager, actuary/consultant, auditor or attorney—should be involved in providing advice or assistance in each phase of the captive life cycle or with specific tasks.

Another section sets out detailed best practices for all captive service providers covering such areas as managing relationships, servicing guidelines and creating deliverables, followed by service provider-specific guidelines for dealing with actuaries/consultants, attorneys, captive managers and auditors.

Discussing the guidelines, Ryan Ralston, chief operating officer of ERI Solutions Inc. in Colwich, Kan., stressed the importance of strong relationships between service providers and captive owners.

“Relationships are so important,” Mr. Ralston said. “We have to go above and beyond and build those relationships because that will hold you through the tough times. And there will be tough times.”

He noted the guidelines suggest that service providers should treat each relationship with a captive owner as a long-term commitment, providing innovative input where appropriate, taking steps to understand when captive owners need advice or services, fairly representing their level of expertise, and setting standards for communications with captive owners and other service providers.

In working with service providers, he said he appreciates “thought leaders pushing the envelope” as well as understandable documentation. “Try to put it in English whenever possible,” Mr. Ralston said.

Mr. Ralston noted that the guidelines call for service providers to meet the “needs and wants” of captive owners “through state-of-the-art technology, including secure electronic methods for managing data.”

But, he advised service providers, “I'd be a little bit careful of some of the "wants' from captive owners. Some of us may want something that doesn't really provide any benefits.” It's acceptable, he said, for service providers to evaluate captive owners' “wants” and “push back” on those that offer little or no real benefit.

Though reinsurance collection is the captive manager's responsibility, Mr. Ralston said captive owners should stay involved in that process. By doing so, reinsurers “will actually see you are somebody they need to service,” he said. “Build the relationship.”

Looking at the best practices guidelines from a regulator's perspective, David F. Provost, deputy commissioner in the Captive Division of the Vermont Department of Banking, Insurance, Securities & Health Care Administration, also stressed the importance of relationships.

“The key to all this is communications,” Mr. Provost said. “Both directions.”

“We expect you to be truthful,” Mr. Provost said, adding that service providers must understand their captive clients to provide the best service. “If you don't understand the goals and objectives of your clients, you're not going to come out with the kind of work product that they're after,” he said.

“The key with all your service providers, actuaries, consultants, managers and your regulators is constant and open communication,” Mr. Provost said.