How can RRGs be rehabilitated? Some domiciles don't have the dedicated staff, but sometimes all a candidate needs to do is go back and examine the reasons the captive was formed in the first place, TMG said.

In recent years, for instance, some RRGs invested their capital significantly in equities, when in hindsight, that might not have been the best investment strategy, TMG said.

"Maybe your captive has moved on and the reasons you created it aren't applicable anymore," Mr. Ragosta noted. "Or maybe you just strayed from what made it successful."

He said TMG will sometimes get insured members of an RRG involved in underwriting and claims committees, "because who understands their business better than they do?"

To emerge from rehab, captives may try:

o Creating a new or revised business plan and fine-tuning it annually.

o Committing to quarterly meetings to measure progress and monitor changes.

o Reviewing pricing, but not necessarily reducing it, to retain business as market conditions change.

Len Crouse, a principal with TMG and former Vermont captive regulator, said, "In Vermont, we would often talk to captives in rehabilitation about why we stopped them from writing new business and offer suggestions about restructuring losses reserves, surplus and expenses so they could write business again."

Mr. Ragosta added, "It comes down to sound financial and business principles. Rehabilitation won't work for many captives, but it can be satisfying for those who succeed."