A Captive is a closely held insurance company owned and controlled by their insureds.

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Prepare for the Certified Authority of Workers Compensation (CAWC) Exam with multiple choice questions and in-depth content. Each question comes with detailed explanations and helpful hints to ensure you are ready for your certification.

Multiple Choice

A Captive is a closely held insurance company owned and controlled by their insureds.

Explanation:
Captive insurance companies are created by a business to insure its own risks, so ownership sits with the insureds. That makes the captive closely held, typically owned by the parent or a small group of insureds who also control it through board and management decisions. This structure gives the owners direct influence over coverage terms, pricing, and claims handling, aligning risk financing with their own risk management goals. Variations exist (like single-parent or group captives), but the common thread is ownership and control by the insureds.

Captive insurance companies are created by a business to insure its own risks, so ownership sits with the insureds. That makes the captive closely held, typically owned by the parent or a small group of insureds who also control it through board and management decisions. This structure gives the owners direct influence over coverage terms, pricing, and claims handling, aligning risk financing with their own risk management goals. Variations exist (like single-parent or group captives), but the common thread is ownership and control by the insureds.

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