Property & Casualty

Property & Casualty

Overview of the Property & Casualty Program

The proposed captive insurance program is designed to provide Property & Casualty (P&C) coverages, through an admitted fronting carrier and commercially reinsured through the insureCap Facility, a licensed Protected Cell in the State of Tennessee. insureCap offers both homogeneous and heterogeneous group captive programs. All participants become a member of insureCap’s P&C program without needing to purchase an interest but simply by signing a Participation Agreement; all of the benefits without any of the hassles.

The Benefits

insureCap PC operates as an Unincorporated Cell (UC), offering a simplified entry for participants:


  • No purchase of interest in the protected cell is required.

  • Participants join by signing a Participation Agreement.

  • insureCap Insurance Company acts as the attorney-in-fact on behalf of the UC, managing its operations.

  • Members are considered participants, not stockholders, in insureCap PC.


Proposed Loss Funding Mechanism

All lines of coverage are fronted, whereby the primary policy is issued by an admitted and rated carrier. The Front then cedes the risk to the group captive program. The program funds for losses utilizing an A/B/C Funding structure for loss coverage:


  • A-Fund: Dedicated to covering all losses up to a specified dollar amount, addressing the frequency of losses. This fund is primarily used and is designed to be twice as accessible.*

  • B-Fund: Covers losses that exceed the A-Fund limit but are below the commercial reinsurance layer’s lower limit. This fund is aimed at handling severe or “shock” losses and is shared among all program participants.

  • C-Fund: Is covered by commercial reinsurance and protects our participants from catastrophic risks.

Collateral Requirements

Collateral levels are determined by the Front but generally align with industry standards, requiring captive participants to collateralize to the expected loss for one year, with adjustments made annually. The collateral payment is spread over a three-year period and can be financed as part of the premium financing.

Flow of Funds

The flow of funds within this program follows a structured path, which can be adjusted to meet specific needs:

  1. Premium Payment: Insured parties pay their premiums directly to the front.

  2. Fronting Fee and Commissions: The front retains a fronting fee and pays any agent commissions from the premium.

  3. Front cedes to insureCap: The net premium, after fronting fees and commissions, is ceded to insureCap.

  4. Collateral and Net Premium Allocation:

  • Collateral is collected from insured members and deposited into the 114 Trust.

  • The Net Premium is split into 2 silos: Pure Loss Costs and Expense Loads. The typical split is 65% for losses and 35% for expense loads. Of the 65% whatever you do not pay in losses may be returned to you as underwriting profit.

  • insureCap is responsible for reinsurance payments (C-Fund).

This program structure is designed to optimize the management of Workers’ Compensation risks for participants, leveraging the benefits of a captive insurance arrangement while ensuring compliance and financial stability.