A captive is a closely held insurance company that is owned and controlled primarily by its insureds. A captive is formed to insure or reinsure the risks of its owners or related parties of their choosing. They are regulated under special legislation, located on and off shore and generally licensed in only one domicile.
Being in a captive allows self-funded employers to manage and reduce costs while increasing control over employee benefit programs. Captives allow self-funded employers to pool some of their large medical claims with other likeminded companies to stabilize cost fluctuations.
Why a Captive?
The main reason captives are formed is to increase the level of control beyond what fully insured programs allow for. Captives provide increased employer control, coverage level flexibility, claims handling management, and the reduction of embedded insurance program profit margins.
We will evaluate the advantages and disadvantages of various captive arrangements to help you determine which captive is most beneficial for you. Contact us for more information.