Alternative Risk...

Captive


 

Captive
A captive is an insurance company that primarily insures the risks of its owner and is actively managed by the owner and/or insureds often with the assistance of a captive management company. The assets of a captive are owned by the insureds. Domiciles like Bermuda, the Cayman Islands, Barbados, Ireland, Vermont, Colorado, Hawaii, and South Carolina provide the favorable legislation and established infrastructure necessary to support the captive insurance industry.

Rent-A-Captive
A rent-a-captive is a captive insurance company that "rents" its capital, surplus, licenses and other administrative services to third parties.   This allows the insured to participate in a program with many of the same features of self-insurance, but the the security of the standard policy issued by an admitted carrier.

Rent-a-captives are an alternative for smaller to medium-sized programs where the insured is unable or does not wish to commit the full capital and resources necessary to establish a captive.

• Flexibility of design
• Return of underwriting profit
• Investment income
• Ease of entry and exit