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GUIDELINES FOR A CAPTIVE A Risk Retention Group Insurance Company must be large enough to
generate savings that are greater than its annual operating costs. The rule of thumb is $1 million in annual
premiums as the minimum size for an RRG formation, although exceptions do
exist. Companies that fall below the $1 million threshold may want to
investigate a group captive, all rent-a-captives, or a Cell RRG alternative. Either alternative will enable a company to have a premium based on its
own loss experience and to keep the underwriting and investment income earned
on the program. Deciding which to
choose depends on the company’s attitude toward sharing risk with others, its
desire to have an ownership share, its cash position and its ability to make
a long-term commitment to a program. |
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BACK – USE ARROW TO PRINT USE PRINT PREVIEW |
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