Captive Industries

Captive insurance is an advanced form of self funding a risk. Any industry or exposure is eligible if the exposure can be measured, evaluated and priced by an actuary and if the captive owner is willing and able to fund the risk adequately.

Successful captives develop from many industries. TradeWinds Management Group, Ltd. understands that each industry is unique and has specific governing requirements and regulatory needs. TradeWinds also understands that any captive structure must meet actuarial and accounting audit requirements; pass Internal Revenue Service reporting requirements and meet the statutory and regulatory requirements of the domicile.

TradeWinds also provide treasury service to insure that no premium dollar is ever at rest or in any way left behind. This insures the best possible yield and use of the created captive funds. The captive must (1.) provide the owner control over the risk funded, (2.) create a protected financial asset and it must (3.) run as a profit making venture.



The healthcare industry incorporates risks that range from small assisted living centers to the largest pharmaceutical manufacturer. The risks include the following: government and regulatory risk, business risk, and professional liability risk—just to name a few. TradeWinds Management Group, Ltd. has unequalled expertise in dealing with all facets of this industry. It has developed proven structures to meet regulatory requirements for both insurance and healthcare.

The key to using captives/limited purpose companies to insure health care entities is to be certain that the structure meets all the requirements for reimbursement under the Provider Reimbursement Manual. These guidelines are extensive and intricate since they involve the use of government money.

Another critical aspect of captive management is to partner with the best legal staff available to defend claims. TradeWinds captive owners take an active role in the defense or settlement of their claims and the protection of their assets.

As with all industry groups addressed by TradeWinds, healthcare owners participate in the operations of their captives for 3 primary reasons: to gain control of their costs; to use their insurance premiums to create an investment they own and to make a profit.


Coastal Properties

Coastal property owners are encountering tremendous swings in pricing and uncertain availability of property insurance. The captive structure works for this if property owners ban together to share and pool risk of loss. The captive funds the first layer of loss and then reinsures the balance.

Coastal properties also suffer from limited flood coverage. The captive can use a similar approach to provide excess flood coverage plus design a “drop down” option that will pick up the coverages and terms not found in the federal flood insurance policy. These may include additional personal property coverage, replacement cost coverage and coverage for foundations and basements.

The wind-verses-flood argument disappears if the captive properly funds both exposures and the owners have control over the claim process.


Food Industry

Captive owners can use their captive to insure liabilities involving their food products business not readily available under traditional insurance policies. New exposures of loss from wheat mold (Ug 99 Puccinia Gramaria), product recall, acts of terrorism introducing poison or pollutants, absence or shortage of foodstuff supplies, radically increased prices, currency fluctuations and government bans on exports of food. These unique exposures have limited coverage in the traditional insurance market. A captive may insure these developing loss exposures.

Captives also insure more traditional exposures common to all commercial enterprises including auto, property, commercial general liability and product liability.



The construction industry can also benefit from the use of a captive. A group of contractors or a single contractor can form their own insurance company, where they can control their own premiums and coverage amounts and manage their own risk for general liability and workers compensation.

Using a captive, on a wrap-up program can facilitate control over the program for the owner or general contractor. It has the ability to set premiums such that the captive can take on the underwriting profit.

A captive can be used to insure contractor default exposures, where the captive takes a large retention and funds for default claims.