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Captive Insurance Arrangements

By John N. Ellison and Luke E. Debevec
November 30, 2014

Companies that use captive insurance companies to manage risk are increasingly being victimized by excess insurance companies and reinsurers that participate in their insurance programs. Excess insurers and reinsurers know when they are insuring or reinsuring a risk that uses a captive insurer for claims handling and decision-making, yet when a large claim must be paid, they may feign surprise and seek to use the captive's relationship with the policyholder as a way to resist paying claims by casting suspicion on the captive's claims decisions. Captives and their owners can proactively avoid some of these common pitfalls.

Background

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