America West used a combination of F/O sim instructors and retired captains as sim instructors for our initial sim work. Checkrides were and are always done by check airmen, who are all seniorish captains. US Airways did away with the retired guys and just uses F/O instructors and check captains.
We use AQP for our yearly 2 day sim checks. Everything is scripted for both days and graded. Individual instructor deviations from the script are not allowed. Sim instructors do the first day, check captains do the second day, which is a 2 leg loft. Decision making by the crew is reviewed by the check captain.
IOE is where your new captains learn their trade, not in a sim.