Labuan: A Leading Domicile For Captive Insurance

Captive insurance, while dating back to the 1950s, has enjoyed increasing popularity in recent decades. Basically, a captive insurance is wholly owned and controlled by those it insures. Its primary purpose is to insure the risks of its owners.

Because the owners are also the insureds, they are able to exert much greater control, especially in regard to the types of risks insured and the decision process surrounding underwriting, as well as loss control, operations, and management.

In its simplest form, a captive is a wholly owned subsidiary created to provide insurance to its non-insurance parent company (or companies). Captives are essentially a form of self-insurance whereby the insurer is owned wholly by the insured.