The Fronting Wars continue

A fronting company is a licensed insurance company that issues an insurance policy and reinsures the risk of loss back to the captive insurer owned by the insured. This allows the insured to benefit from both having a captive insurer and being able to obey regulations that mandate the insurance company that is issuing the policy to be licensed. Furthermore, this licensed insurance company allows the insured to work with other parties that require their insurance company to be rated, whereas this would not be the case in a pure captive situation. However, the market for providing fronting services is becoming dramatically smaller and insurance companies are becoming more tentative to enter into these agreements.
Despite the fact that the use of captives as a ri...