insurance captives definition
A Captive Insurance Company is an insurance company that primarily insures the risks of businesses which are related to it through common ownership. For example, the owner or a group of businesses can form a wholly owned Captive Insurance Company for the purpose of insuring his related companies. The insured businesses pay premiums to the Captive in exchange for insurance. The Captive can be owned by the business owner, his spouse, his relatives, a Trust, or any of the companies he owns.