If you are held captive, you could just as well be held hostage. Over the years, your arm may have been twisted to accept yet another new set of clauses that were, quite frankly, quite incomprehensible. And forget about asking the insurance agent to explain these to you. Because if he couldn’t have been bothered, he didn’t know how. Fortunately, that game has been up for a long time already. Industry standards have improved. And more importantly, state and federal trade and industry institutions have applied minds to making the broad-based commercial insurance industry the fair practice it was meant to be.
But no matter how many qualified chartered accountants, actuaries and underwriters have been recruited into one of the world’s longest running scams, it remains to be seen. How can paying for the losses of others and getting nothing in return be a fair practice? And how can underestimated or rejected claims payment requests be right when, all through your business life, you have been dutifully paying your premiums, just as you would submitting your tax returns. Captive insurance principles and practices have turned the insurance industry on its head.
At this stage, the industry remains complacent to this bracket creep in the sense that they still regard themselves as being ‘too big to fail’. Remember 2008? Now dubbed the great recession? Insurance companies be warned. But small to medium sized businesses that may well have the potential to grow rejoice. Captive insurance, in actual fact, sets you free. You are no longer responsible for the fraudulent claims submissions that others make. And you are no longer susceptible to the financial losses that too big to fail companies make and the unaccounted for premium increases dictated to you.