What is a group captive insurance company?

WHAT IS A GROUP CAPTIVE? A Group Captive functions as a licensed and admitted, limited-purpose property and casualty insurance company, owned and managed by its members under IRC Section 831(a) with an emphasis on risk control and loss prevention practices.

What is the difference between a single parent captive and a group captive?

Single-parent owners normally have several million dollars in premiums committed and ideally have seven or more subsidiary companies in the program. A group captive, also known as a sponsored captive, is an insurance company owned and controlled by unrelated organizations.

What are the different types of captive insurance companies?

Types of Captives

• Single-Owner Captives. These captives are set up and operated by a single owner to insure its own risks and the risks of its subsidiaries and affiliates.
• Group Captives.
• Rent-a-Captives.
• Protected Cell Companies (PCCs)
• Special Purpose Captive.

What is a captive insurance subsidiary?

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.

Why to join a group captive for insurance?

Group Captives By joining a group captive to satisfy their primary casualty insurance needs, many organizations avoid the challenges of cyclical traditional insurance and reduce total cost of risk. Unlike a traditional insurer, a group captive is not in business to maximize profits.

What are the benefits of a group captive?

Like single-owner captive insurers, group captive insurers offer the key benefits of pricing stability, insurance coverage stability, and improved services. However, the use of group captives is feasible for organizations that do not have adequate capital resources to form their own single-parent captive.

What are the largest captive insurance companies?

The companies with the largest number of captive insurance agents include State Farm, Allstate, Farmers Insurance Group, American Family Insurance.

What is covered with captive insurance?

Like traditional insurance, captive insurance can cover several types of risk. It can underwrite public and product liability , physical property damage , professional indemnity , employee benefits such as medical aid, and employer’s liability.