What is the difference between independent and captive insurance companies?

The difference between an independent and a captive insurance company in Illinois is that one is owned by an individual or group of individuals and the other is owned by a parent company or a larger corporation. An independent insurance company is owned and managed solely by its owners, which some people see as a benefit because it allows for more freedom of decision-making and greater customer service. On the other hand, a captive insurance company is one that is wholly owned by a larger corporation or organization, such as a bank or other financial institution. Captive insurance companies are usually subject to the regulations of the parent company and are often set up to help the parent company handle or manage their own risk. In terms of regulations, Illinois requires all insurance companies, whether independent or captive, to obtain and maintain a valid certificate of authority from the Illinois Department of Insurance in order to transact business in the state. This rule applies to both individual agents and companies, regardless of whether the company is captive or independent. In summary, independent insurance companies are owned by individuals or groups of individuals and are not subject to the regulations imposed by a parent company. Captive insurance companies, however, are owned by larger corporations or organizations and are subject to the regulations imposed by the parent company. All insurance companies in Illinois must obtain and maintain a valid certificate of authority in order to legally transact business in the state.

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What is the difference between independent and captive insurance companies?

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