CICA 2011 Conference – Tucson AZ was a learning experience
I attended the CICA Conference this week in Tucson AZ. The conference provided a large amount of information that I will have to sift through and post some of the important info on this blog next week.
One thing I quickly learned was how fast domestic captives are growing, overall. There are many states that are now domiciles for captives, including Missouri. There were many offshore captives represented at the conference including Bermuda, USVI, and the Cayman Islands.
Captive insurance arrangements can be complicated. I do think this is where insurance markets are headed if the current economical woes persist. Captives are a valid alternative to the traditional insurance markets. I would not have said that five years ago.
A quick definition of Captives –
Captive insurance refers to insurance that provides coverage for the group that established business. It is a type of insurance that provides to its parent company. Captive insurance company is a corporation whose stock is owned by one or a small number of companies and which handles all or a part of the insurance needs of its shareholders or their affiliates. Generally, under captive insurance, the parent company can deduct the premiums set aside as loss reserves. Captive insurance draws a dichotomy between true insurance and arrangements which have been found to constitute, in substance, self-insurance.
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