1.1 History of Captive Insurance The history of captive insurance can be traced back to the early 19 th century, although its origins can be seen in even earlier risk management practices. The concept of self-insurance, where companies set aside funds to cover potential losses, dates back centuries. However, captive insurance as we know it today emerged in the 1950s as a more structured and formalized approach. The establishment of the first modern captive insurance is often credited to the pioneering efforts of Frederic M. Reiss, who formed the first captive in the United States in 1953. Reiss sought a solution for insuring the risks of a multinational mining company’s operations that were challenging to cover in the traditional insurance market. By creating a wholly-owned insurance subsidiary, he would gain greater control over the risk management and balance sheet. Following this initial development, captive insurance began to gain recognition and attract interest from other large corporations. This prompted further exploration, research, and development of captive models and structures that could cater to the unique needs and capacities of intrigued organizations. In the 1960s, the captive industry experienced significant growth with the establishment of over 100 captives. During this time, a key figure emerged who played a crucial role in shaping the modern captive insurance movement. Sidney Pine, an attorney, became instrumental in assisting Fred Reiss and many others in the formation of captives. Pine's expertise extended beyond mere legal assistance, as he also navigated the complexities of dealing with the Internal Revenue Service (IRS) regarding captive insurance structures. His contributions went beyond individual captives, as he provided valuable guidance to offshore domiciles in developing captive legislation. Due to his substantial involvement and expertise, Sidney Pine is often considered a noteworthy figure and could be acknowledged as one of the "fathers" of the modern captive insurance movement. Throughout the 1960s and 1970s, captives saw increased adoption as companies such as Gulf Oil and Owens-Corning Fiberglass formed their captives. These early adopters recognized the potential advantages of captive ownership, such as cost savings, risk control, and improved claims management. In addition, the Captive Insurance Companies Association (CICA) was officially formed in 1972, housing single-parent captives for larger-sized businesses. The CICA is now known as the only “domicile-neutral captive insurance association that is free from jurisdictional & commercial ties” (Source: CICA). By the end of the 1970s, the CICA achieved a milestone by reaching a whopping total of a hundred represented single-parent captives. This provided a platform for these owners to come together, exchange knowledge and experiences, and discuss best practices in captive insurance. Through conferences organized by CICA, captive owners had the opportunity to learn from each other and gain insights into the evolving foundation for single-parent captives. The growth of captive insurance accelerated throughout the 1980s and 1990s. At the start of 1980, the previous record of one hundred in the 1960s was smashed as the total number of captives multiplied by 12.5x to the new record of 1,250. This resulted in the CICA welcomed
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