Captive insurance
A self- insurer or self-insurance Company (English Captive Insurance Company or short Captive, from English captive " tied up " for " trapped" or ) is a captive insurance company that is the parent company to hedge captive insurance risks in the context of self-insurance.
Typically include self-insurance companies to large, often multinational corporations, since most likely the required quantity of operation for the company's insurance portfolio is achieved. When using a Protected Cell Company or Series LLC of access for smaller businesses is possible.
Subdivision
One can own insurer for the type of group involvement and the variation of the application areas are divided: A pure captive insurance (English " pure single captive" ) is the self- insurer of single group who wears even risks of this group. In a common self- insurer (English "mutual captive" ) located close together various groups to make cover their risks through a jointly -operated self-insurance companies. Similarly constructed industrial self- insurers (English "industry captives "). About one in English "broad captive" said part - captive insurance risks of foreign companies are covered, so that the transition to a traditional insurance company is fluid.
The classification of own insurer after betriebenem insurance business results in two groups: the Eigenerstversicherer assume the risks of the Group directly and typically spend a portion of the risk to a reinsurer. Depending on the financial strength of the parent company, even in this part, high deductibles are agreed; often only major losses covered. Contrast, self Reinsurers assume a reinsurance risk arising from the Group's risks, which are supported by a normal insurer remains. The self reinsurer in turn retroceded if necessary, parts of her risk taken by more unaffiliated reinsurers (so-called retrocessionaires ). With own reinsurers insurance premiums can be saved through high deductibles and minimize risk and part of the premium is about the assignment of the primary insurer to the captive insurance back into the group.
Attributes and special features
The headquarters of the own insurance company is often chosen (weak regulation and low tax rates ) in the USA, Malta, Cyprus, Liechtenstein and known as " tax haven " small states. The national taxation rules are very different, so fall in the State of Delaware to 0.3 % sales tax for small captives and 0.1 % for large captives. The foundation conditions are variable, ranging from a minimum capital in the British Virgin Islands from $ 10,000 up to 1,000,000 CHF in Liechtenstein. An example from the U.S.: In New York, the minimum capital is 100,000 U.S. dollars.
Since both the insurance premiums and the claims payments remain with the Group, is superficially the risk simply to be transferred within the Group, so no profit for the company from the operation of self-insurance can be seen. Benefits for the Group can derive from several aspects, however. Thus, the self- insurer permit skillful juggling of different international tax laws and regulatory requirements. In addition, captives enable the Group access to the reinsurance market, so that targeted risks to reinsurers can be passed than would be the case with a foreign insurance solution for the Group. By way of alternative risk transfer own insurance company can serve the relocation of Group risks to specific vehicles that have access to the reinsurance market.
The self- insurer may also advantages as a center of expertise for successful claims management (for example, by operating measures for fire prevention for the operating building) for the group play. If it is possible to reduce the risks given to the self- insurer, it must make a little spending for the settlement of claims; are not consumed for the injury settlement insurance premiums remain so in the Group.
Of the insurance companies, the purpose captive insurance differ, among other things by the fact that they - as insurance companies - can also cover risks as a primary insurer. This, the purpose of insurance companies do not have the authority to operate the insurance business (§ § 5 et seq VAG )