Direct Workers Compensation in Captives: Its Time Has Come


Captive Use Trends and Innovations | Michael Maglaras | Principal | Michael Maglaras & Company


Michael Maglaras, principal of Michael Maglaras & Company, proposes that the time has come to insure direct statutory workers compensation in captives on a nonfronted basis. In 49 US states, an organization can become a qualified self-insurer, and in 36 of these states, an organization can become a group self-insurer of workers compensation. When comparing becoming a qualified self-insured with writing workers compensation in a captive, the process starts to lend itself to captive treatment. This means the program is underwritten, funded, and managed directly through a captive insurer where the policy is issued directly on the captive's paper. Workers compensation in captives insurance is usually done as a deductible reimbursement program or as a fronted program with stacking letters of credit over multiple years. Mr. Maglaras asks us to imagine short-term and long-term disability programs as well as direct statutory workers compensation put together in one captive insurance program.