(a) The captive insurance company, or attorney in fact, must designate individuals to form a governing body. Collectively, the members of the governing body must have the ability and experience necessary to oversee the captive insurance company's operations. The ability and experience needed will vary with the size and complexity of the captive insurance company's operations.(b) The governing body is responsible for the following:(1) establishing and documenting the internal control procedures used by the captive insurance company, or attorney in fact. If a captive insurance company, or attorney in fact, uses an affiliate's procedures, the governing body must review the procedures for appropriateness and modify where needed;(2) documenting a conflict-of-interest policy and procedure, and monitoring it to verify compliance;(3) overseeing all entities providing captive management services to the captive insurance company;(4) monitoring counterparty risk, which could include banking institutions and reinsurers;(5) setting the captive insurance company investment policy; and(6) managerial control, insurance information, and compliance with the Insurance Code and department rules.