American International Group announced that “the American International Companies have introduced a domestic sponsored captive licensed in Vermont, National Union Fire Insurance Company of Vermont, to provide alternative risk management solutions for U.S. exposures.”
Charles Dangelo, AIG VP -Domestic General Insurance and President of AIG Risk Management, Inc., noted that “The changing economic and insurance market conditions have created new challenges for businesses seeking insurance coverage in the traditional market, increasing demand for alternative risk programs.”
“Risk managers are being confronted by coverage gaps, shrinking capacity and increased retentions,” he continued. “The Domestic Sponsored Captive Program responds to this environment, offering insureds a solution for filling in their risk management programs and managing their increased retentions. The availability of the Domestic Sponsored Captive Program further positions the American International Companies leadership in providing alternative risk programs.”
A “sponsored captive” greatly resembles a “rent-a-captive” in that the policyholders do not own the insurance company, but make use of its facilities to cover their risks. AIG’s announcement indicated that “A sponsored captive program enables clients to fund portions of their risk exposure and may have benefits over a more traditional captive structure.”
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