Who is the owner of a captive insurance company?

The owner of a captive insurance company is the parent company. A captive insurance company is an insurance provider that is wholly owned and controlled by its insureds, usually a corporation or a group of companies. This structure allows the parent company to self-insure certain risks while retaining the profits generated from the insurance operations rather than paying them to a third-party insurer.

Captive insurance companies are often created to provide tailored insurance coverage that may not be readily available in the commercial insurance market. In this arrangement, the parent company has the ability to influence the underwriting process and align insurance coverage with its specific risk management goals. The parent company thus plays a crucial role not just as the owner but also as the primary beneficiary of any premiums paid and claims managed by the captive.

Other options, such as employees, policyholders, and shareholders, do not accurately reflect the ownership structure of a captive insurance company. While employees may work for the parent company and policyholders might benefit from the insurance provided by a captive, the actual ownership lies with the parent company itself. Shareholders may have interests in some insurance companies, particularly publicly traded ones, but in the case of captive insurance, the owner is specifically the parent company that established the captive to manage its own insurance needs.