AS&K 'The Brief' - Rent-A-Captives Revisited

Bermuda has long been recognised as the domicile of choice for the world's captive insurance industry. One reason for Bermuda's pre-eminence is the success of arrangements which may be structured under its insurance laws, which offer alternatives to more conventional risk management options available in the "traditional markets".

A "captive" is a closely-held insurance company whose insurance business is primarily supplied and controlled by it's owners - in the sense that the owners have and exercise direct involvement and influence over the company's major operations, such as its underwriting, claims management and investment policies - and in which the original insureds are the principal beneficiaries. The "rent-a-captive" represents an evolution of the "captive" insurance company, and has been employed for specialised situations for nearly as long as more standard forms of captives have been operated.