What best describes a Group Captive?

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Prepare for the Risk Management Temple Exam 2. Study with interactive quizzes, flashcards, and detailed explanations for each question. Boost your readiness and confidence for the exam!

Multiple Choice

What best describes a Group Captive?

Explanation:
A Group Captive is an insurer formed to insure the loss exposures of several companies, typically within the same industry, and is owned by those member companies. The captive pools premiums and covers claims for its members, giving the group more control over policy terms, pricing, and risk management, and often enabling cost savings and more tailored coverage. This setup is distinct from an insurer owned by a single company, from an insurer that only writes life policies, and from a state-run pool, which is government-operated rather than member-owned.

A Group Captive is an insurer formed to insure the loss exposures of several companies, typically within the same industry, and is owned by those member companies. The captive pools premiums and covers claims for its members, giving the group more control over policy terms, pricing, and risk management, and often enabling cost savings and more tailored coverage. This setup is distinct from an insurer owned by a single company, from an insurer that only writes life policies, and from a state-run pool, which is government-operated rather than member-owned.

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