- Lower insurance costs: Captives generally have lower administrative costs and owners retain underwriting profits and investment income
- Increased capacity and coverage: A captive can insure risks that would otherwise be uninsurable or too expensive in the commercial market, plus they can provide broader coverage
Ask a Specialist
- What are the major reasons for establishing a captive?
- What is a captive?
A licensed insurance company established primarily to insure the risks of its owners.
- What is a custody account?That captive's assets are held in an account either onshore or offshore1 depending on the captive's domicile. Comerica can provide online access to the account at no extra charge.
- What is a letter of credit?
A letter of credit (also called an LOC) is a document issued by a bank for a fixed dollar amount that is an irrevocable obligation to pay upon presentation. Fronting insurance companies require LOCs to assure that the captive honors its reinsurance obligation and for regulatory purposes.
- What is a Regulation 114 Trust?
A Regulation 114 Trust is an alternative to an LOC. It is adopted from the New York Department of Insurance regulations and is a three-party agreement between a captive, a fronting insurance company and a bank. Although usually cheaper than an LOC, investments are generally more restrictive.
- What is Comerica’s role?
Comerica provides banking services (e.g., letters of credit, custody accounts, Regulation 114 Trusts, investment management, etc.) once the captives are up and running.
- Why Comerica?
Comerica has been servicing the special needs of captives for over 15 years and has a dedicated team of captive insurance professionals active in all major domiciles.