Iowa Public Television

 

Minnesota Co-Ops Form Off-Shore Insurer

posted on September 24, 2004


Twenty-three agriculture co-ops have formed their own offshore-based captive insurance company  a form of self-insurance  to better control their liability, auto and property insurance cases.

The company, Pillar Insurance Ltd., is believed by industry observers to be the first captive formed by agriculture co-ops nationwide. Pillar's 23 co-ops are all in southern Minnesota and range in size from $10 million to $200 million in revenue.

A captive insurance company, which shareholder members own and operate, lets shareholders stabilize the cost of insurance, invest their premiums, and retain profits. They also assume more risk and must raise start-up capital, set aside reserves to cover claims, and meet regulatory requirements.


Tags: agriculture co-op insurance Minnesota news