insurer-sponsored agency captive
Enhanced profit-sharing schemes structured as offshore captive
facilities. They are the most popular and innocuous form of agency
captives, typically created and sponsored by large multiline insurance
companies. Participating agents and the sponsoring insurer each
purchase one share of the captive's stock, which funds the captive's
capital and surplus. The sponsoring insurer provides reinsurance,
fronting, and ancillary services. Agents take a share of the captive's
retention; the sponsoring insurer takes the rest. Participating
agents commit to placing a minimum amount of business with the sponsoring
insurer, which cedes the captive's percentage.