There are many medical stop loss captives available in the market. What are the most important characteristics brokers and their employer clients should look for in a stop loss captive partner?

The Tokio Marine HCC – Stop Loss Captive has been around since late 2012, and in those five-plus years of captive experience, we have developed an approach that we feel is both efficient and sensible. The growth we have experienced, and the continued success of our captive partners, is evidence that our approach is worth considering.

There are three main factors that make the TMHCC Stop Loss Captive an industry leader:

1. Underwriting Captive

Many stop loss captives espouse the phrase “the more money you put into a captive, the more money you can get back.” Is this the most efficient use of the employer’s premium dollar?

Consider that many of the companies that run stop loss captives only make their money from the fees they charge, and those fees are typically a percentage of the premium in the captive. These companies, as a rule, do not take risk in the captive. Therefore, who benefits from putting more premium (and along with it, more risk) into the captive?

At TMHCC, we share the risk with the captive employers. We are responsible for all claims that exceed the captive layer. Beyond that, our underwriting team prices the risk as if it were entirely our risk. We do not artificially discount the stop loss pricing, even though we are not technically on the risk in the captive layer.

We do charge fees in the captive, but they are among the most competitive in the market. We do not rely on our fees for our profitability – we just look to cover our costs.

Our underwriters are regional experts, and consistently produce pricing that is competitive and profitable. You want experts in stop loss pricing acting as good stewards of the employer’s premium dollar, guarding the front door of any stop loss captive.

2. Simplicity

There are many ways to add complexity to a stop loss captive. Our approach at TMHCC is different. We view our stop loss captive as a standard stop loss policy with an enhancement.

Most tenets of the stop loss policy remain the same. The employer pays premium the same way, their claims are reimbursed in the same way. They are free to choose whichever TPA they would prefer to use. The information we need in order to produce a quote is the same.

The captive is managed behind the scenes by the TMHCC experts in financial accounting, legal, regulatory and compliance, and all other necessary aspects. We provide monthly reporting to the producer, accounting for every penny in the captive. There are no hidden costs or fees.

3. Flexibility

The TMHCC Stop Loss Captive is open to a wide range of captive possibilities. Our financial stability (A++ ratings in AM Best, best available) allows us to be creative and flexible.

We offer a turnkey model that offers every function that a stop loss captive needs: an existing captive cell, captive management, stop loss policy, reinsurance, and back-room capabilities.

Producers and their employer clients can utilize any or all of the above functions. We have successfully transitioned several existing captives into our captive, some of which use our full suite of products, and some of which we act simply as the fronting carrier and reinsurer. TMHCC is comfortable working with other captives, domiciled either on or offshore. We also have business with multiple 3rd party captive managers that help support a stop loss captive.

We believe these characteristics have lead the Tokio Marine HCC – Stop Loss Captive to be a leader in this space and have TMHCC uniquely positioned to continue to succeed. Contact us to learn more.