Structural Documents | Part 3

The Insurance Policy protects the employer against risk exposure to its business through fortuitous events.

The Reinsurance Agreement expresses how the captive shares its risk with others; it is the financial leverage your captive gets from other captives.

In the case of a fronted reinsurance captive, the reinsurance agreement sets the parameters between the captive and the fronting carrier. It should express the fronting fee, quota share arrangement and other attributes on cost and claim flow.

The Retrocession Agreement is only applicable to captives which participate in a risk pool. The Retrocession Agreement expresses how the risk pool accepts a claim from a captive, and subsequently allocates that claim to all the captives in the risk pool.

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