To the common consumer the term rent a captive is a befuddling if not deceptive term. To the professional acquainted with the insurance field, it is among the niche markets of insurance coverage that quite a a couple of souls and businesses prefer to be in. The conception could be befuddling and the regulations and polices regarding captives and rent a captives can appear rather foggy to the commoner. But with a bit inquiry and definition of terms, the business enterprise pattern gets clear and potentially a choice for a lot of businesses.
First, we must specify what a captive is. A captive is an insurance firm established with the aim of covering dangers emanating from the parent groups. Utilizing a captive is an adventure management tool applied by a business enterprise to build its own insurance firm. The captive becomes a subsidiary to the parent to pay off its releases in an prepared social system.
A rent a captive is a company that will offer the usage of its captive to other companies for a sure fee, while isolating itself from losses inside the same company. This process is occasionally applied for interests that are too little to excuse starting their own captives. This profits the parent company in that they accumulate revenues for the service but diversifies the measure of risk they must bring out themselves to. It also pays them more profit to put to amplify its gaining establishment. This is how rent a captive can be helpful.