How popular are captive and risk retention groups?
PS: They are a popular vehicle within the healthcare space, and I think their use will continue to grow. MA: Right now the insurance market is relatively flat in that we’re not seeing huge medical malpractice rate increases. However, when premium rates increase and availability of coverage decreases, the popularity of captives will absolutely increase. Q: What are the benefits and risks of these alternative types of arrangements? PS: Physicians must keep in mind that engaging in a captive requires a totally different mindset. You are no longer paying premium to an insurance carrier with the thought that they will cover losses. In a captive, you are essentially paying a premium to yourself, but now you are the one responsible if there is a loss. There are ways to limit ultimate losses; however, you must understand that you may sustain a loss under this type of arrangement. Setting up a captive or risk retention group also does take some size. There needs to be enough physicians to finan
