What is a captive feasibility study? A feasibility study is a study undertaken to determine whether a contemplated risk financing program is feasible for a particular organization or group of organizations. A study, or a proposal for a captive feasibility study, should always begin by stating its scope and purpose.
An insurance pundit once observed that "fronting" is the same as "backing." That seemingly oxymoronic comment is not far off the mark in describing the relationship between a captive insurer and a fronting arrangement. Read on to find out more about fronting arrangements and captive insurance.
What is captive insurance? A "captive insurer" is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits.