CAPTIVE DEVELOPMENT


“The notion of an insurance company owned by the original insureds wasn’t a new one. The large oil and primary materials companies had been using them for decades.”


The second was the development of original coverages, wordings, and methods of underwriting that the buyers found more suited their needs. Examples such as bankers’ blanket bond wording, the definition of triggers and occurrences, and even pollution wording originated with captive insurance innovations. Associated with these insurance wordings innovations were the development by group captives of specialised services for their insureds, such as the training programmes required by the Attorneys’ Liability Assurance Society for its law firm clients’ lawyers. Specialised services are a hallmark of successful captives.


The third is the development of ‘mini-captives’, or cells (also called segregated accounts, segregated portfolios, and other names) for


specialised use by large captive owners, but more importantly, placing the use of a captive within the reach of smaller and privately-held insurance buyers, as well. Cell structures have some of the attributes of the original do-it-yourself single-owner captives, and some from the shared risk and shared services of group-owned captives, too.


Onshore-offshore At first there were only a few captive domiciles, because there wasn’t much demand for captives. Bermuda was the leader, followed by other offshore domiciles interested in developing their financial services beyond personal trusts (which still are the main business


26 CICA | Forty years of captive leadership


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