Why are CIC’s Formed?
The formation of a captive insurance company is a multi-faceted business decision arising from the combination of desires to reduce expenses. The following areas are general reasons to form a CIC: • To improve the quality of medical service for increased profitability • To take direct control over the management of risks and events in order to reduce or eliminate claims • To direct or control the CIC’s financial investments of its surpluses and reserves, enjoying long-term financial rewards and returns of successful insurance operations. • A CIC can turn the perpetual outflow of expenses paid to commercial carriers into a profit center that retains underwriting profits and grows proportionately with the good practice of medicine.
The formation of a captive insurance company is a multi-faceted business decision arising out of the combination of desires to reduce expenses; to improve the quality of medical service for increased profitability; to take a direct control over the management of risks and events in order to reduce or eliminate claims; to direct or control the CIC’s financial investments of its surpluses and reserves; and to enjoy long term financial rewards and returns of successful insurance operation. A CIC can turn the perpetual outflow of expenses paid to commercial carriers into a profit center which retains underwriting profits and which grows proportionately with the good practice of medicine.
