['Business planning - Motor Carrier']
['Insurance and risk management - Motor Carrier']
07/23/2024
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Captives typically will only insure a portion of the total risk and have direct access to the reinsurance market to assign that portion that they do not cover. Benefits to working with a captive include potentially lower premiums, profits of the captive being returned as dividends to its members, and more streamlined claims handling.
Scope
In some cases, captives can offer coverage at a more attractive rate, or provide insurance to a carrier that is having difficulty locating the proper insurance for their needs.
Regulatory citations
- None
Key definitions
- Captive insurance company: A private, self-funded, limited purpose company specifically constructed to provide insurance coverage to a select group.
Summary of requirements
Types of captives. There are several types of captives, the most common being single parent, group, and agency:
- Single parent captives are similar to self-insurance as the parent company establishes, funds, and operates the captive for the purpose of a single company.
- Group captives on the other hand, are owned by several companies that share a similar risk. They are operated by an administrator that performs the day-to-day operations of the captive and its support functions.
- Agency captives are formed by insurance companies or brokerages. These captives function similar to Group Captives with the agency or brokerage serving as the administrator.
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['Business planning - Motor Carrier']
['Insurance and risk management - Motor Carrier']
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