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Attractions include ease of startup, lower investment
SCOTTSDALE, Ariz.-Cell captives offer several advantages as alternative risk transfer mechanisms, but before entering these arrangements, participants need to be aware of potential downsides, speakers told the 16th World Captive Forum.
Referred to by a variety of names, including "protected cell captives," "segregated cell companies" and "segregated portfolio companies," cells continue to expand and now are one of the fastest-growing areas of captive business, the speakers said during an educational session at the conference in Scottsdale, Ariz., earlier this month.
C'ell facilities operated In' sponsoring entities that allow iiulividual cell participants to insure their risks in the captive. Typically through legislation, each cell is protected from liabilities incurred by other cells and participants.
A cell captive is easier to create than a new single-parent captive because the cell's sponsor has already established the facility and paid some startup costs, said Lawrence Bellinger, president and chief executive officer...