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DIFFERENT TYPES OF CAPTIVES

Single Parent (parent-only or pure captive)

 

 

A wholly owned or controlled company, which is formed to primarily insure the risks of its non-insurance parent or affiliated companies which are related.

 

 

Association or Industry captive.

 

 

An Insurance company owned by a trade, industry or profession for the benefit of its members. It includes industry pools where the risks of all members are pooled and then ceded back to participants on a shared basis, and Risk Retention Groups (RRG).

 

 

Agency Captive.

 

An insurance company owned by insurance brokers or agents to reinsure a portion of the insurance they sell.

 

 

Group captive (Stock or Mutual).

 

A company owned by a group of companies created to meet a common insurance need.

 

Quasi profit center or open market captive.

 

 

A subsidiary whose primary business is that of a single parent captive but which also insures the risks of unrelated parties or assumes open market reinsurance business.

 

 

Rent a captive.

 

 

This is where a captive offers its services to others, usually those too small to justify incorporating their own captive insurance company.

 

 

Rent a captive segregated portfolio companies.

 

 

This format allows an insurance company to segregate its assets and liabilities of different participating shareholders and have the segregated cells protected from the liabilities of other such cells within the same company.

 

 

 

F. Darrell Lindsey

State Approved Captive/RRG Manager

U.S. State Licensed Agent/Broker

 

 

 

 

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