Captive Structure Comparison
| Structure | Ownership | Risk Sharing | Minimum Size | Best For |
|---|---|---|---|---|
| Group captive | Multiple employers | Shared among members | 50–100 employees per member | Mid-size employers seeking captive benefits without single-parent cost |
| Single-parent captive | One employer | Retained by owner | 1,000+ employees | Large employers with strong risk management |
| Cell captive | Cell owner (employer) | Cell-specific; core assets protected | 200+ employees | Employers wanting captive benefits with lower capital requirements |
Health Captive Applications
Captives are most commonly used in health benefits for stop-loss coverage. Instead of purchasing stop-loss from a commercial carrier, the employer's captive writes the stop-loss policy. The captive retains the stop-loss premium and pays claims — building surplus over time. If claims are favorable, the surplus belongs to the employer (or the group captive members).
Captive Feasibility
IQ Insight
Captive feasibility depends on employer size, risk tolerance, and financial capacity. A single-parent health captive typically requires 1,000+ employees and $500,000+ in initial capital. Group captives are accessible to smaller employers — some accept members with as few as 50 employees. The key question: does the employer have the risk tolerance and financial capacity to absorb stop-loss claims in a bad year?