With the help of this article we are sharing with you the complete details about the one of main type of insurance name captive insurance.
Companies use captive insurance companies as a risk management tool.A captive insurance company is an entity created and controlled by a parent, whose main purpose is to provide insurance to its corporate owner.
The ideology behind this method is that the parent company may save regarding overhead costs and profits which would otherwise be charged by the insurance company.
Types of captive insurance,
There are two types of captive insurance.
1: Pure captive,
A Pure Captive is an insurance company established by the parent organization to provide insurance cover to itself or its subsidiary or affiliated organizations
2: Group captive,
Group Captives are those formed by a group of companies for providing insurance cover for controlling their respective and collective risk.