Rent-a-captive is a facility whereby a client (sponsor) ‘rents’ the capital of a registered insurer to underwrite insurance business.
No risk is retained in the rent-a-captive facility therefore all risks must be fully collateralized by premium, additional capital contributions, reinsurance or letter of credit.
- Segregated account for a client’s stand-alone insurance program
- Underwriting profits determined by own loss experience
- No pooling of risks with other segregated accounts
- Robust legislation ensures that one account cannot attach to the assets and liabilities of another account.
- Single line deductible reimbursement
- Medical stop loss
- Single parent risks that are too small for stand-alone captive