Which captive arrangement consists of insuring multiple entities under one policy?

The correct choice is characterized by the ability to pool risks from multiple entities under a single insurance policy. This arrangement allows various members of a group to share insurance costs and risks while retaining the benefits of a captive structure. A Group Captive is specifically designed for this purpose, enabling companies with similar risks or industries to collaborate and create a shared insurance coverage that benefits all participants. By doing so, members can achieve economies of scale, reducing individual risks and assisting with better pricing and coverage tailored to their collective needs.

Captives, in general, serve to customize insurance coverage and improve risk management for participating companies. However, the differentiation in this context lies in the collective arrangement of multiple entities, which is unique to Group Captives. This structure contrasts with other captive types, where the focus is either on a single entity or specific arrangements that do not offer the same collaborative approach.