captive insurance company


An insurance company owned entirely by the policy holder. The policy holder can be a parent company, its clients, subsidiaries, companies in the same industry or trade, and/or service group. If the company only insures the parent and its clients, it is called a pure captive. Like traditional insurance companies, these are established to insure assets or assure against losses from a contingent event.

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It was a captive insurance company which meant that it was owned entirely by the policy holder and not the company.

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Besides providing private risk management, a captive insurance company can be structured to provide the parent company significant tax benefits under the US tax code.

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A captive insurance company allows for larger corporations to keep their benefits "in-house" as a cost-savings mechanism versus external insurance companies which would have higher premiums.

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