#captive feasibility study

Capital allocated to the Captive Insurance Company is an investment that earns interest income and provides a base for operational income. The Captive owner moves money from one pocket to another expecting a handsome return for doing so. The capital allocation requirement is usually between 20% and 40% of the annual premium income projected in the captive feasibility study.

The Captive Insurance company must be operational for at least one year prior to providing Health Insurance Coverage to its employees. Single Parent Captives that employ less than several thousand employees will probably find it wise to pool their captive employee benefits risks with those of other small and medium-sized companies.