Insurance: Captive Insurer Global Rating Methodology

Introduction

This document describes Kroll Bond Rating Agency, LLC and its rating affiliates’ (collectively, “KBRA”) general rating methodology as it pertains to the financial strength of captive insurance companies. For the purposes of this methodology, a captive insurance company is defined as an entity whose primary business is to accept the underwriting risk of its owner(s) and that is licensed and regulated under its domiciliary jurisdiction’s captive legislation. To the extent allowed by the domiciliary regulator, the underwriting risk of affiliated third parties is included under this definition. Third-party risk may include, but is not limited to, customer programs, multinational employee benefit programs, suppliers, vendors or non-employed contractors of the owner(s) and U.S. ERISA benefit programs. Should third-party business become the predominant exposure of the captive, KBRA may determine that its