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Jul 12, 2024 · A captive insurance company is a wholly-owned subsidiary that provides risk mitigation services for its parent company or related entities. The potential benefits of a captive insurance company ...
- Julia Kagan
Oct 17, 2022 · A captive is a self-insurance vehicle that can help companies keep a lid on rising insurance costs. It can also plug gaps in any risk cover left by today’s difficult insurance market – where premiums and deductibles are rising and companies retain more risk on their balance sheet. And it can work as a way to build up reserves to cover risks ...
Captive insurance. Captive insurance is an alternative to self-insurance in which a parent group or groups create a licensed insurance company to provide coverage for itself. The main purpose of doing so is to avoid using traditional commercial insurance companies, which have volatile pricing and may not meet the specific needs of the company.
Jul 1, 2021 · One of the many reasons to choose the "captive option" is because of accounting and tax rules, which allow for the deduction of insurance premiums by insurance companies. Again, as a captive is an insurance company, reserve funds held for the payment of future losses are deductible. If a company simply increases its retention, the funds held in ...
A "captive insurer" is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits. These points do not clearly distinguish the captive insurer from a mutual insurance company.
The Definitive Guide to Captive Insurance is your one-stop resource to understand the ins and outs of captive insurance. You'll have common questions answered, be in a better position to determine if a captive is a right fit, come away with step-by-step instructions for implementing a captive, and be able to introduce the concept to your executive team confidently.
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The captive evaluates the risks, writes policies, sets premium levels and accepts premium payments. The subsidiaries then pay the captive tax-deductible premium payments and the captive, like any insurer, invests the premium payments for future claim payouts. At its core, a captive insurance company is a risk-financing tool.
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