01-26-2010, 03:27 AM
A company that is owned in a large part or solely by one or more non-insurance entities for the main purpose of providing insurance coverage to the owner or owners. This risk-financing technique is when you form an insurance company as a subsidiary of an organization in order to provide that organization with insurance.
Your company may have certain high risk aspects that make it difficult to insure. Another reason for a captive to be created is that there are enough participants to form your own insurance pool.
Some of the benefits that a captive will offer is access to certain insurance coverage that is not offered by the usual marketplace, an opportunity to get a return of premium if claims are not paid out, specialty insurance coverage for a specific industry or business and a great stability of coverage without threat of cancellation.
If your association offers a captive insurance company coverage then you should look it over carefully. There could be benefits available to you that you cannot get elsewhere. Talk to your agent or broker.
Your company may have certain high risk aspects that make it difficult to insure. Another reason for a captive to be created is that there are enough participants to form your own insurance pool.
Some of the benefits that a captive will offer is access to certain insurance coverage that is not offered by the usual marketplace, an opportunity to get a return of premium if claims are not paid out, specialty insurance coverage for a specific industry or business and a great stability of coverage without threat of cancellation.
If your association offers a captive insurance company coverage then you should look it over carefully. There could be benefits available to you that you cannot get elsewhere. Talk to your agent or broker.