Types of Captive Insurance Companies

Agency Captive

Captive owned by one or more entities that are either insurance producers or managing general agents. Captive only insures the risk on policies placed through its owners.

Association Captive

Captive completely under the direct or indirect voting control of an association. An association is any lawfully formed association of individuals or business entities that has been in existence for at least one year and that is organized for a primary purpose other than procuring or providing insurance for its members.

Industry Group Captive or Industrial Insured Captive

Captive that is completely under the direct or indirect voting control of any industry group. An industry group is two or more business entities or persons that are engaged in business or activities similar or related with respect to the liability to which they are exposed by virtue of any related, similar or common business, trade, product, services, premises or operations.

Risk Retention Group

An insurer that is organized pursuant to the liability risk retention act of 1986 (15 United States Code sections 3901 and 3902).

Protected Cell Captive or Sponsored Cell

Captive in which (a) the minimum capital and surplus is provided by one or more sponsors, (b) insures the risks of participants through participant contracts, (c) segregates liability under a participant contract through one or more protected cells.

Pure Captive

Captive that insures only the risks of its affiliates and controlled unaffiliated business.

CONTROLLED UNAFFILIATED BUSINESSﾠ
An individual or business entity that is (a) not an affiliate of the Captive insurer providing coverage or reinsurance, (b) has a contractual relationship with an affiliate of the Captive insurer providing coverage or reinsurance, and (c) whose risk management function is related to the covered risk of loss is controlled by an affiliate of the Captive insurer providing coverage or reinsurance.

Note: Other types of Captive's exist. This list is limited to the most common types of Captive's, as found in the majority of the domiciles.