Summary
When they need to insure their financial health against fire, terrorism, and liability lawsuits sparked by defective products and polluting factories that kill people, they don't call State Farm. Instead, corporations routinely insure themselves by creating a "cap- tive" insurance company as a wholly-owned subsidiary. "The parent company is insuring its own risk," says Sandy Bigglestone, of Vermont's Captive Insurance division.
Captives also save administrative costs, since they have "an incentive to do business efficiently" because "it's eventually coming out of the same pockets," Dennis Harwick, president of the Captive Insurance Companies Association, told the Atlanta Journal-Constitution. On top of that, captive insurance companies rake in tax breaks by deducting from their profits the money they are required to reserve for payout- even if they never have to pay it out.Most of the world's captives are domiciled (sounds so homey) in Bermuda and the Cayman Islands, making them one-stop tropical shops for tax shelters and self-insurance. "About 85 percent of the top 50 healthcare systems in the United States have some relationship with the Bermuda market, either through captives domiciled there, or by buying reinsurance for their captives," insurance insider Judy Hart told the trade group, Bermuda Captive Club.See the full content of this document
Extract
Capitalist Health Insurance for All
HERE'S WHAT CORPORATIONS know, but don't want you to find out: Private insurance is for suckers.
Armies of healthcare industry flacks, lobbyists and bought-and-paid-for legislators rant that nonprofit, public insurance is a ...See the full content of this document
Sponsored links
