Captives glossary

Agency Captive
A reinsurance company owned by an insurance agency or brokerage firm in which they may participate in a portion of their client's risks.

Association Captive
An insurance company owned by a trade, industry or service group for the benefit of its members.

What is a Captive?
A captive is an insurance or reinsurance company formed to underwrite the risks of its own, non-insurance, parent group, and provides a long-term and efficient approach to the financing of retained risk.

It provides increased control over the long-term cost of risk to the captive owner. Companies form captives for the following reasons:

To lower the overall cost of risk financing

Cash flow benefits

To facilitate differing levels of risk retention across the group

To create synergy and return from risk management efforts

Access to the Reinsurance Market

Corporate Governance over self-insurance

Flexibility

Tax Advantages

Captive Feasibility study
The feasibility study is documentation of how the captive program will operate and is a required element of the captive application. The study is often the pivotal piece of information used to determine viability and decide whether to proceed with the formation of the captive. The study will include both a written summary of the business plan and five years of projected financial results. Those interested in forming a captive will need to provide three to five years of past premium and claims data as well as prospective information related to the insurance risks the captive is anticipated to write.

Captive Feasibility Study Proposal

Isosceles
The JLT Insurance Management rent-a-captive facilities based in Bermuda and Guernsey are available to clients and allows those companies who lack sufficient insurance premium volume, or who are averse to establishing their own insurance subsidiary, access to many of the benefits associated with an offshore captive.

Protected Cell Company
A PCC is a company with an internal structure that allows for the legal segregation of assets and liabilities into different cells and a central core. This framework is designed to offer increased protection to investors in individual cells from the liabilities and creditors of other cells. See Isosceles.

What is a Rent-a-Captive?
Is a company that provides 'captive' facilities to others for a fee. This facility is often used for programs that do not justify establishing a stand-alone captive. See Isosceles.

Segregated Account Company
Segregated Account Company enables the creation of an account, which contains assets, and liabilities that are legally separate from the assets and liabilities of a company's ordinary account. Similar to a Protected Cell Company

Single Parent Captive
See Captive

Special Purpose Vehicles
Although used extensively in the past for various financing arrangements, recently they have been used for catastrophe bond issues.

JLT Events

JLT host a range of events throughout the year. To find out more click below.

	26/07/2010	Europe's leading independent insurance brokers announce a closer affiliation
	26/07/2010	JLT International Network
	30/06/2010	IPT Bulletin - June 2010
	20/01/2010	Jardine Lloyd Thompson Limited recruits to further strengthen Financial Risks Division
	24/12/2009	A unique view of the future