Group and Association Captives

A Captive Insurance Company is a corporation formed by a business or a group of affiliated organisations for the purpose of accepting insurance or reinsurance risks in which they have a direct interest. Through ownership profits and control are retained enabling the owner(s) to enhance its (their) business performance. Captive companies represent the most advanced form of self-insurance as they involve the incorporation of a separate company. As separate legal entities they require boards of directors to be formed, auditors to be appointed and separate capitalisation. Consequently they represent the greatest commitment to self-insurance and because of these special features they are often referred to by a unique term which is alternative risk transfer or ART. Group Captives A Group Captive is a captive that is owned by a number of different parents who are normally from the same industry. Association Captives An Association Captive is similar to a group captive except that it is sponsored or owned by an association, which is normally homogenous in nature.