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​Captive Insurers

Captive insurance is a regulated form of self-insurance, in which the insurer is owned wholly by the insureds. A captive insurance company's insureds have direct involvement and influence over the company's major operations, including underwriting, claims management policy and investments.


Nevada is one of the oldest captive domiciles in the United States. Nevada is consistently ranked at the top of business surveys as one of the most business-friendly states in the nation. Nevada captives benefit from the following:

  • Knowledgeable captive experts

  • No corporate tax

  • No personal income tax

  • No gift tax

  • World class professional services 

  • Experienced, knowledgeable state regulators

  • State incentive programs

  • All commercial lines are acceptable on a direct basis

  • Professional pro business regulatory environment


Nevada also offers a tax credit of up to $5,000 applicable to the first year of a captive’s acquisition of a Certificate of Authority. 

Why Consider a Captive

There are many things to consider when forming a captive:

Reduced insurance cost: By using a captive, companies are able to charge themselves a premium equal to their historical loss experience.

Stabilized insurance budgets: By using a captive, an entity may be able to set insurance reserves equal to ultimate expected losses, therefore providing for some consistency in insurance expense. From a subsidiary's prospective, the captive provides for more consistent year-over-year insurance premiums, as retained earnings in the captive are used to absorb worse-than-expected results in bad years.

Direct access to the reinsurance market: A captive provides insureds with direct access to a market they could not access otherwise, or at least not in a very efficient basis - the wholesale reinsurance market. Since re insurers have lower cost of operation and regulatory barriers, they can often provide coverage at more affordable rates. 

Improved claims handling and data collection: Under a fully insured or large deductible program, insureds often rely, or are required to rely on their insurer to keep a historical database of their claims activity. Insureds too often discover several years later that the information was not kept in a very useful format or is very difficult to access. By using a captive, insureds can often un-bundle claims administration services to Third Party Administrators (TPAs), who specialize in the lines of coverage insured and take control internally of when, what and how information is reported. 

Possible tax benefits: Captive insurance taxation is a very complex topic, but in short, there are some tax advantages available only to insurance companies. Under the right set of facts and if structured properly, these tax advantages may be available to a captive program.

Profit center creation: While captives are typically used to insure the risk of its parent(s), under the right circumstances and depending on the risk appetite of the captive owner, the entity could be used to insure third party or controlled unrelated risk such as risk of customers, vendors, or franchisees. If managed properly, insuring unrelated risk could become a profitable endeavor to a captive owner.

Negotiation tool: Once formed, the greatest benefit of owning a captive is probably the additional negotiation power it provides during discussions with the commercial market. An insured can easily and rapidly decide to insure a risk or a portion of a risk in its captive if it is in a situation of being overcharged by the commercial market. It is not unusual to see an insurer adjusting its rates downward when faced with the likelihood of losing a piece of business to a captive, since once a risk is insured in a captive, it very rarely returns to the market.

Additional Resources

Nevada Commission on Economic Development is an excellent resource for finding information about establishing and growing your business in Nevada.

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