A captive insurance company:

Question

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A captive insurance company provides a mechanism for self-insurance, where the parent company creates its own insurance company to insure its risks. The captive insurance company can provide coverage for the parent company's unique or hard-to-insure risks. A captive insurance company may also have its own employees and underwriting guidelines. It is not limited to providing loss control services or using attorneys in fact, nor does it sell insurance to the public using independent agents.

A Captive Insurance Company