Spring Consulting Group, LLC - Definition of Captive

A captive insurance company is an insurance company that is owned and controlled by its insureds. According to Captive Insurance Companies Association (CICA), the first captive ever formed was in the late 1800s, and was designed to write more cost effective fire insurance policies for New England textile manufacturers that were hit hard by increasing market rates. A large number of captive insurance companies were established in the1960s that offered alternative risk management solutions to various types of organizations particularly in the property casualty line of business. Captives gained further popularity in the 1980s as a result of the US liability crisis, particularly in the medical arena.

As captives have continued to grow over time, employers are considering employee benefits as a new or expanded coverage. The more recent hard market and changing economy is expected to spur even more and rapid industry growth yet this year.

Captive Resources - What is a captive?

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