Captives May Not Be 'Time Bombs,' But Buyers Must Beware Minefield
A mini-brouhaha erupted earlier this month over a quote in a Wall Street Journal article about alternative risk financing, suggesting that “captives are a time bomb waiting to explode.”
The president of the Captive Insurance Companies Association, Carl Modecki, didn't take that blow lying down. He lashed back at the employer of the quote's source with a letter demanding “an immediate retraction.” He argued, quite correctly, that “the use of a captive, in and of itself, is not inherently riskier than purchasing insurance in the open market.”
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