How are Captives Regulated?
Commercial insurance companies sell insurance to the general public and are licensed in all states in which they do business. By contrast, CICs directly insure only their owners, who are sophisticated insureds, with the ability to manage and retain their own risk. Consequently, the degree of regulatory oversight required for captives is less than that which is required for commercial insurers. The captive is licensed in only one state, and operates under the captive insurance law of that domicile.
