What best describes a Group Captive?

What best describes a Group Captive?

• A. Insurers the loss exposures of multiple companies usually in the same industry
• B. Insurer owned by one company
• C. An insurer that only insures life policies
• D. A state-run insurance pool

Answer: (A)

A Group Captive is an insurer formed to insure the loss exposures of several companies, typically within the same industry, and is owned by those member companies. The captive pools premiums and covers claims for its members, giving the group more control over policy terms, pricing, and risk management, and often enabling cost savings and more tailored coverage. This setup is distinct from an insurer owned by a single company, from an insurer that only writes life policies, and from a state-run pool, which is government-operated rather than member-owned.

A Group Captive is an insurer formed to insure the loss exposures of several companies, typically within the same industry, and is owned by those member companies. The captive pools premiums and covers claims for its members, giving the group more control over policy terms, pricing, and risk management, and often enabling cost savings and more tailored coverage. This setup is distinct from an insurer owned by a single company, from an insurer that only writes life policies, and from a state-run pool, which is government-operated rather than member-owned.