In captive insurance, an all-purpose term having one of three different
meanings: the amount initially needed to set up a captive, or the initial
amount paid in; the total of this paid-in capital plus other forms of capital,
like letters of credit; or the sum of these two plus accumulated surplus. The
difference between capital in a captive and other forms of insurance capital is
that the owners usually consider it risk capital, ready to be used up by
adverse results of the business. This is why one seldom hears about
"impairment of capital" in captive financial discussions. Instead,
one hears about "reduction in capital."