Administration November 11, 2008

Companies Consider Captives to Fund Employee Benefits

November 11, 2008 (PLANSPONSOR.com) - Sixty percent of organizations with captive insurance facilities are considering or have considered using their captives to fund employee benefits, according to the Captive Best Practices Survey by Spring Consulting Group, LLC.
Reported by

The survey results captives are playing an increasingly strategic role in assertively managing insurance and employee benefit costs, according to a press release. A captive is an insurance company formed exclusively to insure (or reinsure) the insurance risks of its parent corporation. That is major Fortune 500 corporations will set up a captive of their own in order to better control – and minimize – their own insurance bill.

The press release said that although captives’ strategic importance is growing, many still lag in the area of benchmarking, with only 45% using benchmarks to manage operations. The most commonly used benchmarks are reserves to surplus (31%) and premium to surplus (32%).

Considering the future of captives, 39% of survey respondents indicated concern about tax regulations.

For a complete copy of survey results, call 617-589-0930.

«