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What Is A Captive Insurance Company. A captive is an insurance company wholly owned and controlled by its insureds. A captive insurance company works in much the same way as a regular insurance company.
A captive insurance company is an organization that exists only to meet the specific insurance needs of its memberowners. There are additional benefits to creating a captive but they should be ancillary to the primary purpose of risk management. Its purpose is to provide insurance coverage for that ownersbusiness assets.
In other words in this model a business owns it own insurance company.
A captive insurance company is just like any insurance company in the eyes of the law. You want one to make money. This company needs a proper license to operate. It is a type of self-insurance.