From: Captive Insurance Times

Organisations are being driven towards medical stop-loss captives as a response to the traditional market failing to evolve and adapt, explained panellists at this week’s Captive Insurance Companies Association (CICA) International Conference.

Describing the status quo of the traditional market, Renee Bosley, senior vice president of employee benefits at EPIC Insurance Brokers & Consultants, noted that the majority of clients turn to captives as an alternative solution to address ever-increasing rates in the commercial insurance market.

Vanessa Andersen, human resources director at Rummel Construction and member-owner of group captive Well Health Insurance, added that the traditional market does not demonstrate why claim costs are as high as they are.

Therefore, examining trends around the growth of medical stop-loss captives should be framed around why the traditional market is failing to evolve, rather than what is changing to make group captives more attractive.

In allowing for a direct contract with pharmacy benefit managers and third-party administrators, medical stop-loss captives significantly reduce administrative costs.