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GUIDELINES FOR A
CAPTIVE A Risk Retention Group Insurance Company must be large enough to
generate savings that are greater than its annual operating costs. The rule of thumb is $1 million in annual
premium as the minimum size for an RRG formation, although exceptions do
exist. Companies that fall below the $1 million threshold may want to
investigate a group captive, all rent-a-captives, or a Cell RRG alternative. Either alternative will enable a company to have a premium based on
its own loss experience; and, to keep the underwriting and investment income
earned on the program. Deciding which
to choose depends on the company’s attitude toward sharing risk with others,
its desire to have an ownership share, its cash position and its ability to
make a long-term commitment to a program. |
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BACK – USE ARROW TO PRINT USE PRINT PREVIEW |
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