August 05, 2014
Response by John Salisbury

If a captive is only providing liability coverage, the captive should be formed as a risk retention group. You are correct in your assumption that this avoids the tough credit standards and the need for a front.

However, if the captive is writing worker's compensation and/or property insurance, it will need a front. The reason for this is that a risk retention group is currently not permitted to write either of these coverages.

Watch for news on possible legislative changes to the Liability Risk Retention Act.