Workers Compensation Captive
A captive arrangement allows a company or companies to share risk and build equity over time. An insurance captive is a closely held private insurance company owned by a parent company of a group of businesses. The purpose of a captive is to insure its own risks. The process is typically managed by a professional insurance company acting as the administrator. However, premiums are paid to the captive company, and claims are paid from the captive. Captive reserve funds may will eventually convert to equity if losses are less than the premium and expenses.