Captive CE

Forming and Operating a Captive Insurer

Course Details

This course is not subject to discount pricing.

Additional Credit Available:

Add Insurance CE

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Field of Study: 

Specialized Knowledge

Last Reviewed: 

April 2021

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Exam Requirements

Proctor Required: 


Passing Grade: 






Please note: Adding Additional Credit may change exam requirements.

Course Description
Captive insurers continue to be formed even during soft market conditions, because when properly used, the captive is an effective risk management tool. Industry statistics indicate that there are more than 5,000 captives on a worldwide basis and that, even during the soft market of the 1990s, the rate of increase in active captives averaged about 5 percent annually. Accurate numbers are hard to achieve in part because of the different classifications of captives. What is a captive in one domicile may be a commercial reinsurer in another. This course examines three aspects of captive management with emphasis on the legal environment in which captives must operate:  the formation of a captive, captive operations, and the issue of unrelated business.

Learning Objectives
Students who successfully complete this course 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, and recognize why a captive can insure many types of risks
    • recognize key differences between captives, commercial insurance, and self-insurance plans
    • 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
    • identify reasons for conducting a captive feasibility study
    • recognize the various factors affecting a captive’s choice of domicile
    • identify the documents and filing procedures involved in forming a captive
    • identify the ongoing responsibilities of a captive’s board members
    • 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
    • identify the types of information that should be included in a captive’s financial statements
    • distinguish between related and unrelated business written by a captive
    • recognize how unrelated business can support the objectives of various types of profit center captives

    An understanding of how the insurance industry is structured.

    CPE Field of Study

    Management Services

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    International Risk Management Institute, Inc. (IRMI) is the premier provider of risk and insurance continuing education and reference publications, and is considered the ultimate authority by leading insurance practitioners. Written by industry experts, IRMI courses provide the most up-to-date, practical and reliable information possible.