7 Things anyone should know about Subsidiary Insurance

What is subsidiary insurance?

For many years, captive insurance companies, belonging to larger corporations, have flourished in the country. The establishment of a majority of these companies began during a time when insurance was unreasonably priced and mostly unavailable. The tax advantages provided by these companies often outweighed the minimal risk management. But what precisely is subsidiary coverage for a layman?

Any Restricted Subsidiary that is subjected and required to the regulation of and file submission to any state authority/official in any territory of the United States is called as Insurance Subsidiary. The Subsidiary of the Borrower is permitted to provide life insurance or auto insurance under a business license. It is supposedly ‘captive’ in nature.

A lot of smaller companies have realized the benefits of subsidiary insurance in the recent years. Attractive tax-planning opportunities that were often afforded exclusively by the larger companies in the past are now open to the small corporations as well. These details may seem confusing to anyone who’s not related to the fields of law and insurance.

Therefore, here is a list of things about Subsidiary Insurance that everyone should know:


In simpler terms, captive insurance refers to a subsidiary company that provides coverages to parent companies and their affiliates. This subsidized company presents options for financial control and risk management by giving you, the large and small corporations, the authority to underwrite your insurance plan.


  • Subsidiary Insurance brings some advantages to you and your corporation. It not only gives you the power of planning your insurance, but it also provides the opportunity to save your hard-earned money. You tailor the plan according to your needs and reduce the operating costs.
  • A monumental change in cash flow and capacity is another reason for you to choose an insurance subsidiary. With better financial control you might consider reinsurance. The insurance subsidiary lets you get access to reinsurance markets without paying to third parties.
  • There’s a strong possibility of a new business stumbling to a loss. This is reason enough for a company to be sensible with their insurance plan. Subsidiary Insurance gives you the fluid availability of investment money to cover for your losses.
  • Another issue with insurance plans is their harsh rigidity. The availability of options makes it hard for any corporation to find a negotiating ground. But with the subsidiary coverage, your project becomes flexible to underwrite and fund.
  • There are many risks involved with underwriting that a company may omit to share. Things such as the costly trade of dollars and risks in the working layer don’t top the list of discussion points. The possibility of leveraging the negotiation to the best of your interests gets overlooked. Greater control over claims is something every corporation asks for, and this is precisely what you get.
  • Estate plans receive support from subsidiary insurance. The insurance providers respect trust set-ups from family members made with parent corporations and thus, benefit you. The business aspect satisfies the requirements for those who find it hard to access their funds.
  • There are unique tax benefits involved in subsidiary insurance. The offshore establishments offer a tax haven and help to cut down initial costs. Larger corporations can set up their subsidiary to gain business benefits. The captive’s benefits become the framework of the jurisdiction.


Subsidiary insurance is an excellent option for each wary of unreasonable insurance pricing and lack of flexible options. Budding businesses may seek refuge by fulfilling the government requirements and make use of the benefits. Profitable business entities looking for substantial annual tax assistance make the ideal users of subsidiary insurance. Other valid candidates for captive insurance include businesses looking for asset protection, uninsured or underinsured businesses at requisite risk and also people looking for wealth accumulation options. Trust fund transfers and total equity protection are a few added benefits.

One of the essential financial assets we have are the automobiles. They are a longer-term investment and needed to be insured by the best available options. If you are one of the people looking for the right subsidiary insurance company for your vehicles, you are in the right space. Gainsco Auto Insurance provides you with options you cannot resist.

Researcher and Content Writer at e-Syndicate Network. A constant learner. Learning and growing every day. Salman has over 5 years of experience in the fields of Digital Marketing, Content Writing, Brand and Business Development.