Captive Insurance Company Law and Legal Definition
Captive insurance companies are those insurance companies which provide insurance against risks accrued from its parent group. Captive insurance serves limited purpose as it is not available to public. Capitive insurance is a form of risk management. There are five types of captive insurance:
1.Single parent captive
2.Association captive
3.Group Captive
4.Agency captive
5.Rent-A-captive
Captive insurance company helps in evading beuracracy and the company can dictate the procedure by which claims can be processed.
Tenn. Code Ann. § 56-13-102 states that a captive insurance company is usually established in a low-tax country. Whether premiums paid to captive insurance companies are recognized as business expenses depends on the country in question.
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