As a result of its settlement agreement, Cypress Insurance Co. is paying back taxes and penalties as well as license fees, but no fines. (Photo: iStock)
Many large businesses look beyond traditional insurance companies to help them manage their risks, and some set up "captive" insurers as an alternative to self-insurance. Generally, a captive is an insurance company established with the objective of insuring or reinsuring the risks of its owner (a single-parent captive) or owners (a group captive). The captive — like other insurance carriers — is regulated by and subject to the laws of the place where it's incorporated. Problems arise when the captive fails to meet the licensing requirements of the state, which is the situation facing Cypress Insurance Co. of Phoenix.
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Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
