It's truly a wondrous world filled with surprises at every turn. Who would think that being a "Captive" insurance company could be a good thing? The word captive has dark connotations, dungeons, bad food, no sunshine. Kind of like being a slave without the work requirement.
However in the arcane world of insurance in the great state of Georgia, a captive insurance company is a good thing. Turns out that they're not really captives, they're in house insurance companies that service the needs of their owners. And they got some perks too!
From the Georgia Captive Insurance Association Website
The Georgia Captive Advantage
The Atlanta Area Metropolis, the eighth largest in the nation and a top business and transportation hub.
Favorable economic climate.
The ability to write all property and casuality directly, including Workers’ Compensation.
No rate and form filings.
Pure, Association and Industrial-Insured captive are available.
No investment restrictions for Pure and Industrial-Insured captives.
Broad reinsurance powers.
Easy access to substantial alternative market insurance expertise.
No premium tax on reinsurance or non-Georgia based business.
No residual market load charges for Worker's Compensation
The three that jump out to me are no rate or form filings, no premium tax and no residual market load charges. The exclusion from the premium tax knocks at least 2.25% straight to the bottom line and that's got to be a good thing for the captives owner. Not such a good thing for the average Georgia consumer, if one group of folks don't have to pay the premium tax, why do the citizens of Georgia at large have to pay it?
Great big ol' hat tip to republican candidate Maria Sheffield for pointing out the existence of captive insurance on her campaign website.
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