Protected Cells & Sponsored Facilities
Speed to market, capital compartmentalization, and tactical risk execution— without the administrative burden of a standalone captive licence.
Agile infrastructure
For financial institutions, establishing a standalone captive for a specific transaction—such as a single Significant Risk Transfer (SRT) or a new product launch—can be operationally heavy and time-consuming. Protected Cell Companies (PCC) and Segregated Account Companies (SAC) provide a “plug-and-play” regulatory infrastructure.
We advise banks on utilising cell facilities to achieve deployment speed and legal/economic segregation. Whether using a third-party sponsor (“rent-a-captive”) or establishing your own core, cells allow you to isolate specific risk portfolios with clear governance and ring-fenced economics.
For synthetic securitisation or SRT transactions, a cell can function as an efficient SPV-like container to house specific tranches of risk, with governance and collateral precisely matched to the deal.
- ■ Legal ring-fencing: assets and liabilities are segregated from the core and other cells, supporting “bankruptcy remote” style isolation often required for transaction recognition.
- ■ Targeted collateralisation: enables deal-specific collateral management (funds withheld, trusts) without commingling with the wider group.
Before committing equity to a standalone vehicle, cells provide a controlled environment to incubate emerging risks or new lines of business.
- ■ Proof of concept: test profitability and loss ratios for niche portfolios (e.g., cyber warranties, crypto-asset custody insurance, or specific trade finance bundles) with lower entry costs.
- ■ Scale to standalone: when volume and data justify it, the cell can be spun out (novation / conversion) into a standalone captive with its own governance.
Where institutions generate insurance revenue from customers (credit protection, warranties, vendor programs), cells segregate third-party liabilities from the bank’s own risk retentions.
- ■ Regulatory hygiene: separate “customer risk” from “bank risk” to simplify governance and reduce conduct / operational contamination concerns.
- ■ Profit attribution: allocate underwriting profit to specific business units or JV partners with clear dividend / distribution flows.
Efficiency & control
Cells are commonly capitalised to the specific risk retained rather than a full captive minimum—maximising ROE and reducing idle capital.
A new cell can often be activated in weeks—critical for time-sensitive structured finance execution or sudden market hardening.
Cells can be closed or placed into dormancy when portfolios run off—avoiding complex standalone liquidation processes.
- ■ Structure selection: advise between PCC, ICC, or SAC depending on the need for separate legal personality and transactional isolation.
- ■ Sponsor selection: help identify the right core/facility partner with sophistication for banking risks (not only P&C lines).
- ■ Governance protocols: design participation agreements so you retain control over underwriting parameters and investment decisions while outsourcing administration.
A focused engagement to design and implement a protected cell solution—optimising speed, capital segregation, collateral, and governance—alongside your broker, facility sponsor/core, legal counsel, and market counterparties.
- ■Time-sensitive SRT / securitisation execution
- ■New risk pools needing proof-of-concept
- ■Customer risk programmes requiring segregation