Captive Insurance

What is a risk retention group

risk retention group (RRG) is an alternative risk transfer entity created by the federal Liability Risk Retention Act (LRRA). RRGs must form as liability insurance companies under the laws of at least one state—its charter state or domicile.

What is a captive insurance group

A “captive insurer” is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer’s underwriting profits.

What are the benefits of a captive insurance plan

  • Premium stability
  • Dividends
  • Generally lower cost
  • Greater control of policy design and operation
  • Access to data

What is a self-insured group health plan

A self-insured group health plan is one in which the employer assumes the financial risk for providing healthcare benefits to its employees. In practical terms, self-insured employers pay for each enrolled employees and covered dependents claims as they are incurred instead of paying a fixed premium per employees per month to an insurance carrier. Paying a fixed premium to an insurance carrier for healthcare coverage is known as fully insured program.

As a member of a captive do I have to put up collateral


What is reinsurance

Reinsurance is also known as insurance for insurers. Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim. The party that diversifies its insurance portfolio is known as the ceding party. The party that accepts a portion of the potential obligation in exchange for a share of the insurance premium is known as the reinsurer.

What is stop loss coverage

Stop Loss coverage (also called Excess Loss) is purchased to cover major claim liabilities above a specific dollar amount. Stop Loss is designed to protect the employer from catastrophic medical claims.