Captive Overview

A captive insurance company is a licensed insurer owned by its insureds. Rather than paying premiums to a commercial carrier, a parent company (or group of companies) forms its own insurance entity to retain risk, access reinsurance markets directly, and capture underwriting profit.

OpenInsure provides the specialized administrative infrastructure needed to operate a captive — member management, cell isolation, loss fund monitoring, stop-loss tracking, and domicile compliance.

Captive Types Supported

Single-Parent Captive

Wholly owned by one parent corporation. Used to insure the risks of the parent and its subsidiaries. Simplest structure to administer.

Group Captive

Owned by multiple unrelated insureds with similar risk profiles. Each member contributes to a shared loss fund and participates in profits/losses.

Protected Cell Company (PCC)

A single legal entity with legally segregated cells. Each cell has its own assets, liabilities, and often its own manager. Also known as a Series LLC in some domiciles.

Setting Up a Captive Organization

Create the captive organization and configure its type:

POST /v1/organizations
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "name": "Acme Captive Insurance Co.",
  "organizationType": "CAPTIVE",
  "captiveConfig": {
    "captiveType": "GROUP",
    "domicile": "VT",
    "naicCode": "10987",
    "licenseNumber": "VT-CAP-0042",
    "captiveManager": "Green Mountain Captive Management LLC",
    "actuary": "Pinnacle Actuarial Resources",
    "lossYear": "calendar",     // 'calendar' or 'accident'
    "stopLossCarrier": "car_01J8...",
    "specificStopLossAttachment": 100000,
    "aggregateStopLossAttachment": 750000
  }
}

Member Management

For group captives, each participating company is a member. OpenInsure tracks:

• Member identity and contact information
• Annual contribution schedule
• Claim history allocated to the member
• Loss ratio by member
• Profit/loss allocation at year-end

POST /v1/captive/:orgId/members
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "memberName": "Northeast Builders LLC",
  "taxId": "12-3456789",
  "effectiveDate": "2025-01-01",
  "annualContribution": 85000,
  "linesOfBusiness": ["GL", "WC"],
  "payrollByState": {
    "VT": 1200000,
    "NH": 450000
  }
}

Member Contribution Tracking

Member contributions are tracked against their installment schedules:

GET /v1/captive/:orgId/members/:memberId/contributions?year=2025

# Response:
{
  "memberId": "mem_01J8...",
  "memberName": "Northeast Builders LLC",
  "captiveYear": 2025,
  "annualContribution": 85000,
  "schedule": [
    { "dueDate": "2025-01-01", "amount": 21250, "status": "paid", "paidDate": "2024-12-28" },
    { "dueDate": "2025-04-01", "amount": 21250, "status": "paid", "paidDate": "2025-04-03" },
    { "dueDate": "2025-07-01", "amount": 21250, "status": "pending" },
    { "dueDate": "2025-10-01", "amount": 21250, "status": "pending" }
  ],
  "totalPaid": 42500,
  "totalPending": 42500
}

Cell Structure Configuration (PCC / Series LLC)

For Protected Cell Companies, each cell is a distinct accounting unit with its own:

• Premium pool
• Loss fund
• Investment account
• Stop-loss coverage
• Cell manager contact
• Regulatory capital allocation

POST /v1/captive/:orgId/cells
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "cellName": "Cell A — Technology Sector",
  "cellCode": "CELL-A",
  "cellManager": "Pacific Rim Captive Management",
  "linesOfBusiness": ["CYBER", "EO"],
  "members": ["mem_01J8...", "mem_02J8..."],
  "capitalAllocation": 500000,
  "stopLossAttachment": {
    "specific": 75000,
    "aggregate": 500000
  }
}

Cell data isolation is enforced at the database level — queries against loss fund, claims, and contribution tables are automatically filtered by cell_id for PCC organizations.

Annual Loss Fund Analysis

The loss fund analysis tool provides the actuary and captive manager with a complete picture of the captive’s financial position:

POST /v1/captive/:orgId/loss-fund-analysis
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "asOfDate": "2025-06-30",
  "projectionYears": 3,
  "ibnrMethod": "BORNHUETTER_FERGUSON"
}

The analysis includes:

• Premiums collected (year-to-date, projected full year)
• Investment income on the loss fund balance
• Claims paid (by line, by member for group captives)
• Case reserves on open claims
• IBNR reserves (actuarially estimated)
• Funded ratio = Loss Fund Balance / (Case Reserves + IBNR)
• Solvency margin vs. domicile minimum capital requirement
• Stop-loss recoveries projected based on current reserve levels

Actuarial Support Requirements

OpenInsure does not replace an actuary — it provides the data and tools that make actuarial analysis faster and more accurate:

Loss Triangle Export

Export a complete paid and incurred loss development triangle (by accident year and evaluation date) in Excel format. Used as input to the actuary’s loss development analysis.

GET /v1/captive/:orgId/loss-triangle?line=GL&format=excel

IBNR Input Data

Export the claim count, paid, and open reserve data by accident year cohort that the actuary needs to calculate IBNR using chain ladder or BF methods.

Actuarial Report Upload

Upload the actuary’s signed IBNR report, which updates the actuarial_ibnr fields in the loss fund calculation. The system flags any variance >10% from the system’s automated estimate.

Domicile Compliance Automation

OpenInsure tracks filing deadlines and sends automated reminders:

• 30 days before annual statement due date: reminder to captive manager
• 14 days before: escalation to captive owner
• 7 days before: urgent notice, compliance officer alerted
• Day of deadline: flag opened in compliance dashboard

See Domicile Guide for state-specific requirements.