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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.
Captive insurance really came into its own during the early 2000s with more and more states enacting captive laws and seeking alternative risk transfer vehicles as a steady source of revenue. Many states, including the District of Columbia and Montana, began to develop their captive programs, creating captive departments, and courting potential ...
[3] [4] In other words, the micro-captive's underwriting income – the difference between earned premiums and incurred losses – is exempt from federal income tax. [5] As of 2020, to qualify for 831(b) status, the insurance company's written premium income must not exceed $2.3 million in a given year, a threshold that is indexed for inflation.
A Honolulu City Council resolution wants state lawmakers to address what it deems are “drastic ” increases in property insurance premiums paid by homeowners across Oahu, particularly for those ...
Hawaii has been the subject of some scary national headlines lately regarding property insurance, but the state insurance commissioner Tuesday expressed a less calamitous view of the industry ...
Insurance rates for some condo projects in Hawaii have soared by as much as 1, 000 %, according to the governor, due to global insurance industry dynamics tied to more catastrophic events around ...
WTC Captive has been criticized by Congressman Jerrold Nadler for spending $103,700,734 on legal fees while paying out only $320,936 in medical claims. On June 10, 2010, a new settlement was announced giving plaintiffs $712.5 million and reducing payouts to lawyers.
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.