Defining Captive Insurance. A captive is a licensed insurance company fully owned and controlled by its insureds – a type of “self-insurance.” Instead of paying to use a commercial insurer's money, the owner invests their own capital and resources, assuming a portion of the risk.
What is captive insurance, and why should I consider it?
- Captive Insureds Put Their Own Capital at Risk. Any insured who purchases captive insurance must be willing and able to invest its own resources. ...
- Working Outside the Commercial Insurance Marketplace. ...
- To Achieve Risk Financing Objectives. ...
- Types of Captives. ...
- Summary. ...
- Get the Book. ...
What is insurance, and does a captive qualify?
- What Is Insurance, and Does a Captive Qualify? When a captive is established, most owners are interested in any potential tax consequences. Payment of premiums to a captive for insurance coverage may well be deductible as an ordinary business expense.
What is the role of captive insurance business?
- Serve as the primary contact with the domiciliary regulators,and ensure compliance with all domicile regulations.
- Develop business plans and pro forma financial statements.
- Maintain the captive's financial and operational records.
- Provide insurance,risk management,and underwriting expertise to the captive.
Which captive insurance structure is right for You?
- The type of captive insurance structure that’s right for your business is dependent in a large part on the size of your company. Larger, more complex businesses can take advantage of the single-parent captive insurance structure. They have the resources to assume more exposure, the management strength to participate in greater detail, and ...
A captive insurance company represents an option for many corporations and groups that want to take financial control and manage risks by underwriting their own insurance rather than paying premiums to third-party insurers. The advantages of going captive are: Coverage tailored to meet your needs.