IMAC Captive Basics Course Group Captives October 19, 2011

Traditional Group Captive Structure 2

Group Captive Flow Insured TPA Claimant Profits BrokerPolicy Issuing CarrierCaptiveExcess ReinsurerLoss Control

About the Captive  Homogeneous vs heterogeneous  Frequency vs severity layers of loss funding  Member participation & use of committee structure  Premiums based on loss experience, so management of claims and loss prevention is critical  Underwritten so that only good risks are accepted  Return of unused loss funds and investment income  Members help the captive to grow

Specific Excess Insurance General Liability Auto Basket & Clash Coverage Included Limit Statutory Workers Comp. Statutory Captive Retention Retention Umbrella Excess

How Is the Captive Protected? Experience Adjustment Loss Fund Aggregate Excess Insurance

Collateral Collateral Functions Member to member obligations Capitalizes the captive Collateralize policy- issuing carrier