Captive insurance company

by Guest » Wed Oct 29, 2008 06:07 am
Guest

Could you guys give me an idea of the benefits of a captive insurance company?

Total Comments: 5

Posted: Wed Oct 29, 2008 07:10 am Post Subject:

Hi,
I'd rather summarize the benefits of a captive insurance company as follows:

  • They would offer you benefits that are specifically designed to meet your needs
  • You'd be offered a premium rate based upon the history of your own past losses.
  • Lesser expenses towards your operations
  • More in terms of coverage

ArindamSenIndies

Posted: Wed Oct 29, 2008 08:49 am Post Subject:

Hi,
It definitely has some income out of investments which could be used to cover up the losses. It would directly connect you with the wholesale market of reinsurance. It also offers more funding and underwriting opportunities.

You'd enjoy more authority over the claims process and earn more out of loss reduction. You'd have a broader scope to negotiate with the fellow underwriters. At the same time, you'd also be in a position to manage risks in a better way!
Norma_hepburn

Posted: Wed Oct 29, 2008 10:34 am Post Subject:

The captive offers coverage only for its parent organizations and its subsidiaries, thus the premium collected remains within company. However, the employer should be careful while insuring employees' benefits through a captive insurance company, because the Employee Retirement Income Security Act or ERISA has forbidden transactions with captive companies.

Hope this helps.

Thanks,
Joyeeta

Posted: Wed Oct 29, 2008 10:43 am Post Subject:

Many companies have their captive companies set at offshore locations to avoid tax complications. Hence, processing and settling the claims with the captive companies may experience some difficulties.

~Jeremy

Posted: Wed Oct 29, 2008 02:35 pm Post Subject:

For my situation, I get to take advantage of their nationwide advertising that as an independent I would never be able to afford.

Also, I own the economic interest in my book of business. When I decide to retire, I can "sell" my business and I pocket all the proceeds.

Add your comment

Image CAPTCHA
Enter the characters shown in the image.