What is the difference between independent and captive insurance companies?

The difference between an independent insurance company and a captive insurance company is rooted in the way they are structured and their purpose. Independent insurance companies are privately owned or publicly traded companies that offer insurance and other financial services to customers. An independent insurance company is not affiliated with any other entity and is free to make their own decisions and establish their own prices for the products they offer. Captive insurance companies are created by a parent company and are generally used to insure the needs of the parent company’s employees, customers or affiliates. Captive insurance companies are subject to the same Oregon insurance regulations as traditional independent insurance companies. However, captive insurance companies are limited to the policies offered by the parent company and are not allowed to offer insurance services or products to the public. The difference between independent and captive companies is that independent companies can create any policy they want and sell it to the public, whereas captive companies are limited to policies set forth by the parent company. While captive companies may initially appear to have certain advantages such as more control over policy design and pricing, independent companies are generally better suited to serving the needs of the majority of Oregon residents.

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What is the difference between independent and captive insurance companies?

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