Coastal Property

August 05, 2014

Response by John Salisbury
CPCU, ARM & ARe
President & Chief Executive Officer
Government Entities Mutual, Inc.
[email protected] 
866-342-5436 ex 100

Captives can write commercial property insurance. However, such coverage can not be written through a risk retention group (RRG). Risk retention groups are formed under federal law and can only write liability coverages.

Because a captive is usually only licensed in a domiciliary state it will undoubtedly need to find a fronting carrier. A fronting carrier is an insurance company that is licensed and admitted or is a surplus lines carrier in the states where the captive wants to provide coverage.

I suspect you will find it difficult to find a fronting carrier willing to write property coverage in coastal states. It will probably also be a challenge to find reinsurance property capacity and favorable terms and pricing.