Sponsored insurance programs have become increasingly popular as a member benefit and nondues revenue source for associations. A "captive" insurance company owned by an association allows the association to tailor insurance protection where members need it most. Increased risk control and more cost-effective administration help lower premium costs. And by offering captive services, associations can attract new members and boost nondues income.
ASAE Business Services, Inc., ASAE's for-profit subsidiary, operates the ASAE Insurance Company (AIC), a sponsored association captive insurance company. Domiciled in the District of Columbia, AIC provides not only a captive insurance facility for ASAE's sponsored insurance programs but also captive management services through its program design consultant and captive manager, Strategic Risk Solutions (SRS).
An association captive is an insurance company that is owned by an association or its members and created to provide insurance exclusively to the association's members. Sponsored captives are identical to association captives with one significant difference: For a fee, the owner and creator of the captive—in this case, ASAE Business Services Inc., may establish separate risk-assumption units or cells for other organizations to use. Through these cells, associations can provide reinsurance for their own sponsored-program operations. The owner-sponsor may insure or reinsure the exposures of one of more of the units.
How Members of ASAE Benefit
ASAE's sponsored captive allows associations with sponsored programs to access captive operations through a turnkey facility that costs less than it would if they were to form a traditional captive and does not require significant start-up cost or capital. Associations that otherwise would not have the resources to effectively develop new captive operations can do so, thereby benefiting from the potential investment and underwriting income generated by this type of program.
Associations best suited to take advantage of AIC's services are those that already operate a successful sponsored insurance program. AIC and our consultant can help associations evaluate their potential to form their own protected cell captive within AIC. Forming such a cell not only is a potential revenue opportunity, it also protects associations from exposures and losses. AIC offers management, legal, accounting, and actuarial resources to qualifying associations, and for a nominal franchise fee, AIC provides capitalization, the use of its facilities, and ongoing business and consulting services.
- ASAE Insurance Company: Facts & Answers
- ASAE Insurance Company Start-Up
- Invitation to Explore a Captive for Your Association
- Captive and Self-Insurance Solutions for Associations
- ASAE Business Services, Inc. Online Resources
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