Product
Solutions
Guaranteed Cost
Workers Compensation
Large
Deductible Plans
Captive
Programs
Individual
Self Insured Plans
Excess
Placement
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Rent-a-Captive
Programs
Account Size $250,000
to Unlimited
(subject to class of business)
A
rent-a-captive is a captive insurance company that can be used or
“rented” by unrelated insureds. It allows insured to
gain the benefits of a captive insurance arrangement without actually
participating in the ownership or management.
Under
the Fully Funded product, an insured is offered an insurance policy
underwritten by the insurance carrier. A rent-a-captive is then
selected to serve as a reinsurer of the insurance carrier. The insured
remits its premium to the carrier, which deducts the program's expenses
and cedes the balance (loss fund) to the selected rent-a-captive
facility. The insured then remits cash and/or a letter of credit
to the rent-a-captive for the difference between the loss fund and
the aggregate limit of its policy. If a letter of credit is provided
to secure the aggregate limit, it must be clean, irrevocable ever
greened and from an approved financial institution. The letter of
credit and/or cash is accessed to reimburse the insured for any
claims that are submitted. Any funds remaining in the rent-a-captive
facility are returned to the insured.
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