Captive insurers continue to be formed even during soft market conditions, because when properly used, the captive is an effective risk management tool. This course examines three aspects of captives with emphasis on the legal environment in which captives must operate: the formation of a captive, captive operations, and the issue of unrelated business. It discusses  the risk management purposes of using a captive, the differences between various types of captives, the factors affecting the choice of domicile for a captive, the filing procedures involved in forming a captive, and the responsibilities of a captive's board members. 

Upon completion, students will be able to:

• recognize the risk management purpose of using a captive to finance an entity’s risks, identify the elements of captive insurance, recognize why a captive can insure many types of risks, and distinguish among various types of captive insurance companies
• identify factors to be considered in evaluating the cost of risk and recognize the various ways in which the costs of financing risks through a captive can be lower than the costs of commercial insurance or self-insurance plans
• recognize the ways in which a captive’s underwriting documentation and other reports and filings can support the captive’s purpose and make it clear that the captive’s policies legally qualify as insurance
• distinguish between related and unrelated business written by a captive

Property and casualty risk, safety, insurance, finance, and accounting professionals.   

A basic understanding of how the insurance industry is structured.