Forming a Captive Insurance Company has become a mainstream tool for mitigating traditional risks (e.g. Property, Casualty, Liability, Medical Malpractice, ...
What does a captive insurance company do?
Issue: In its simplest form, a captive is a wholly owned subsidiary created to provide insurance to its non-insurance parent company (or companies). Captives are essentially a form of self-insurance whereby the insurer is owned wholly by the insured.
What are the two major types of captive insurance companies?
Series LLCs and Cell Companies.
What is a captive actuary?
In the purchase of traditional insurance, the actuary works with the underwriter and others to provide a premium. In a captive situation, the actuary often works largely unaided to calculate a premium that will cover the claims, and provide an underwriting profit.
What is a captive agent?
Captive (sometimes referred to as dedicated) agents are insurance producers who work for one company and sell one company's products. Conversely, independent agents work for multiple companies and can sell multiple different types of products to their customers.