Term Of The Day – Pure Captive
A pure captive is the most basic of all captive arrangements. In the case of a “pure” or “single parent” captive insurer, the financial stability of the third party is completely dependent on the financial health of the parent. Commonly, the assets of such captive insurance companies consist only of the unsecured obligations of the parent facility. Thus, a failure of the parent facility will necessarily cause a failure of the captive insurer.
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