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Captive insurance is an alternative to self-insurance in which insured parties establish a licensed insurance company for their own use and benefit. [1] The company focuses its service on the specific risks of the insureds and is incentivized to price the insurance near cost, since it has no separate investors.
Established to encourage the formation of small insurance companies, it offers an alternative risk-management solution that can supplement or even replace traditional insurance coverage. A micro-captive insurance company, as it pertains to Section 831(b), is a captive insurance company – an insurance company entirely owned and operated by the ...
Captive insurance structures can be classified into three main categories: Single Parent Captives, Group Captives, and Core Cell Captive Insurance Companies, also known as Cell Captives or Core Cell Companies. Cell Captives are entities consisting of a core and an indefinite number of cell entities which are kept legally separate from each other.
Employee benefits self-insurance programmes are often underwritten by captive insurance companies formed, owned and managed by corporations in both on-shore and off-shore captive domiciles. The reason for this is that hundreds of thousands of employees constitute a large enough risk pool for the corporation to be able to predict and price the ...
But an insurance program called a captive changed the rules of the game: This captive, called Big Stakes, incentivized New York-based trainers to maintain safety protocols by giving them a slice ...
Working with a captive insurance agent: If you know you want to work with a specific insurance provider (for example, if you already have a policy with them and want to bundle a new policy with it ...
Captive insurance companies are formed by firms and re/insurers to receive premiums that are generally held and invested as a "funded" layer of insurance for the parent company. Some captives purchase excess of loss reinsurance and offer coverage to third parties, sometimes to leverage their skills and sometimes for tax reasons.
And clearly having a captive insurance company and being able to offer to self-insure when we don't get the pricing we want continues to give us great leverage in those negotiations.
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