European Union Forums

[tokmik]

A company that is owned in a large part or solely by one or more non-insurance entities for the main purpose of providing insurance coverage to the owner or owners. This risk-financing technique is when you form an insurance company as a subsidiary of an organization in order to provide that organization with insurance.

Your company may have certain high risk aspects that make it difficult to insure. Another reason for a captive to be created is that there are enough participants to form your own insurance pool.

Some of the benefits that a captive will offer is access to certain insurance coverage that is not offered by the usual marketplace, an opportunity to get a return of premium if claims are not paid out, specialty insurance coverage for a specific industry or business and a great stability of coverage without threat of cancellation.

If your association offers a captive insurance company coverage then you should look it over carefully. There could be benefits available to you that you cannot get elsewhere. Talk to your agent or broker.