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Workers Comp Captive Insurance Arrangements Question

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Workers Comp Captive Insurance

A question from one (and I love to hear from our blog readers) of our readers on Workers Comp Captive Insurance arrangements –

We are a smaller employer with less than 100 employees. Our E-Mod/X-Mod sharply increased from .8 to 1.3 over the last two years. Would our small size and high E-Mod keep us from exploring a captive for Workers Comp?

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Being a smaller employer or having an increasing E-Mod/X-Mod would not prevent you from exploring a captive.
There are three areas that may help in your search

A Rent-A-Captive is also known as a Protected Cell captive facility. It is basically a captive that is broken down into unlimited mini-captives (Cells). Each cell within the Rent-A-Captive facility can be rented for a fee. Each cell stands on its own within the overall captive. The main thing to watch out here for is the co-mingling/breaching of the assets of one cell with another cell within the captive. This protects each insured’s assets from each other, and makes sure that the failure of one cell does not effect other cells within the Rent-A-Captive. This is usually regulated by law.

The Association Captive and the Similar Employer Captive are both just renamed versions of the Rent-A-Captive. A few of the associations and employer groups such as construction have sponsored great captives. Rent-A-Captives have been in existence since the 1970’s.

The bottom line is that Rent-A-Captives for Workers Compensation make even the smallest employers have an alternative to the regular insurance markets.

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Rent-A-Captives For Workers Compensation

Rent-A-Captives Types Rent-A-Captives are becoming more popular in Workers Comp as a method of risk transfer. Rent-A-Captives used to be viewed as hybrid arrangements that

James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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