Not so secret:
Although agency captives are by no means new, the encouragement
of US domestic domiciles through new legislation in recent years has
brought them into greater focus as agents realise the potential to
become a stronger player in the market. US Captive has the details.
On June 12 Connecticut became the latest US state to introduce
legislation allowing for agency captives, as governor Dannel
Malloy signed law SB 377.
Senator Kevin Kelly and representative Peter Tercyak had cosponsored
the legislation to further the captive insurance sector in
Connecticut by introducing agency captives as a new structure.
Janet Grace, programme manager, captive division at the
Connecticut Insurance Department, says agents and brokers are
facing increasing competition to grow and retain profitable business,
and that an agency captive is a nice way to integrate both.
“Single parent captives, owned by the world’s largest companies,
are a bit of a saturated market. As you move downstream, the risk
management needs of the rest of the market are a bit different.
“Those firms may not have the sophistication or dedicated risk
management staff to focus on developing and managing a captive
solution,” says Grace.
An agency captive is a reinsurance company controlled by an
insurance agency or broker. Through an agreement with a traditional
insurer, the agency captive takes a share of the premiums written,
and has to pay its share of claims.
Agency captives are by no means a new concept, but in the last
few years a number of states have either been introducing agency
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