Fronting Insurer
A Fronting Insurer is an admitted, licensed insurance company that is contracted by a captive to act as a middle man in insurance transactions. It writes and issues policies, collect premiums from the parent company, and pays out claims. However, it does so without assuming many of the risks that a traditional insurer would take on. Instead, it is the captive’s responsibility to reimburse the fronting insurer for any losses incurred through the policy.
Related terms: captive, fronted captive, non-fronted captive
Learn more: What is a Fronting Agreement (and how does it work)?