- The broader term we may use instead of “captive” is “Alternative Risk Transfer” or “Alternative Risk Financing”
- Qualified policyholder’s may save as much as 50% of their premiums over the long-run
- Agent/Broker locks income into account. Once an account is in a captive they rarely exit back to the standard market. Great method to protect larger renewals and strategy to get the new big account.
A New Kind Of Captive
A Superior Alternative To Traditional Insurance
- Tax benefits
- Estate planning benefits
- Customizable risk. We can tailor the financial risk to suit the client.
- And much more!
We will entertain writing virtually any profitable business. It must meet minimum premium requirements and be a sensible candidate for either a group captives or our single parent captive approach.
For single parent captives the likely minimum premium will be no less than $250,000 annually. For the group captives the likely minimum premium will be no less than $500,000 annually. For the specialty BizAssure product premiums will likely being no less than $100,000 annually.
Yes, premium will be completely deductible in most programs.
At this point we don’t have a health insurance option. We would be interested in putting that together in the future.
No. We know it’s a tough exposure right now. Because of this, the risk involved in the captive isn’t applicable. So transportation is pretty much excluded out of hand, you’d have to have something very unique for the captive to be willing to underwrite it.
Yes. You can go here: https://www.bizassure.com/captive/ to submit potential captive members. You can also call Gerald Cooper directly (559-974-1852) to talk about a particular risk. We can help you to get a handle on qualification, and then, when the time is right, we can bring Monica and Nikki in to further discuss eligibilit
The initial capital as of now is zero. We also have premium and collateral. The collateral is a percentage of the “A fund,” or the primary loss fund. Each proposal will have the collateral clearly stated. It’s ⅔’s of the “A fund.” We build up to 2x the average “A fund” over the first three years in the program. After that we maintain a rolling average of 2x the “A fund” on the collateral. Yes. Premiums are deductible..
Your expense ratio is going to be about 40%. So if you have someone that has over a 60% loss ratio, they’re not going to fare very well in the captive unless we’re able to help them clean that up. We have a phenomenal loss ratio team on this captive, and anyone with a 50% loss ratio or lower is probably your best account to pursue. But there are always exceptions to every rule, so we will have to look at it as a case by case basis.
What we are saying is that there could be a business interruption form designed that responds to those business interruption risks. As long as certain qualifications were met and a plan was put into place, the basic answer to this question is yes. Keep in mind, the policy will have limits, just like any other policy, and the limits will be based on the size of the business coming into the program. It could be half a million or a million dollars of coverage, but to reiterate, we have businesses open today because they have these programs in place for themselves. In most other programs, these businesses would either not be in business or would have had to make a drastic decision, but because of these types of captive programs, they had the dollars set aside for situations such as this.
Our group captives will be fronted by either AIG or the Hartford. Single parent captives may have admitted or non-admitted paper depending on the client need and line of coverage chosen.
For group captives capital requirements will be approximately 30% of the loss fund. For single parent captives capital requirements will be based solely on the coverages, fronting paper and reinsurance requirements.
Though captives should never be used as a primary tax planning tool, there are still tax advantages to the captive approach. We will explain some of these details in the upcoming meeting.
Yes, absolutely. One of the great things about captives is the way the reinsurance is structured. Within the captive, you can keep a very good lid on cost. There have been arguments against captives in soft markets. However, they still make a lot of sense and can be better than the alternatives. You’ll see this especially in our property captive. Property is very difficult right now.
No. The TPA on this captive program is Sedwick and will handle all of the claims. They do a phenomenal job. They understand captives, they take direction from their members, and they are very good for every member involved.
Brokers are compensated outside of the program. This is fairly typical nowadays with captive programs. This allows the agent more flexibility. If we come in below your target pricing, you’re able to add in a larger broker fee. If you need to be more frugal with your pricing, and we come around where you expected, you can reduce your broker fee. This flexibility means that we can work together to help everyone get more business. That is exactly what we are trying to achieve.
Unfortunately, no. Trucking is one of the risks that will not work in this captive.
We can run those by AIG. A lot of carriers are a little apprehensive about anything in the healthcare industry. But it is always something we can consider and check on.
Property coverages, general liability, auto liability, and workers compensation coverages will be available. Also, special unique coverages will be available under an BizAssure program.
All group captive paper will be “A” rated and admitted paper. Single parent captives may have “A” rated paper but will likely be non-admitted. For some coverages the carrier will be the offshore carrier owned by the policyholder(s).
The answer is yes. That means that you are under the most extreme scenario protection. Who is protecting you at the end of the day? That would be AIG. That’s the advantage of having an “A” rated fronting company at the end of the day. They’re basically guaranteeing that the claims will be paid.
It is open to home builders. AIG would ask that we carve the general liability out, and leave it in the traditional market and just insure the workers compensation and auto in the captive.
BizAssure is not the captive manager, however, you will be starting the process with BizAssure. We help to orchestrate and coordinate the plan to bring everything together. You will make an arrangement with your client in advance.
Possibly. It is something that we have come across in the past and we have found them to be surprising low loss ratio accounts. We would definitely run these potential opportunities past AIG to see if they are feasible.
In this type of captive we have over 300 different captive owners participating in the reinsurance agreement. Part of the thing that makes this program so unique is the group dimension. We will reinsure the fronting company that has the 300 various other captives. The long and short of it is you’re getting risk sharing galore, and you have access to a company that has been doing this for many years without any issues. We have a long track record for these types of programs going into play successfully. This particular program, which is unique in the marketplace, is a group captive. Why is that important? Because otherwise your client would have to pay premiums in excess of a quarter of a million dollars every year, and that would be a single parent strategy.