Alternative Risk Financing Facilities
Definition - What does Alternative Risk Financing Facilities mean?
Alternative risk financing facilities are private entities that offer risk financing but are not official insurance companies. They include captive insurers, risk retention groups, pools, and individual self insurance. These entities can provide risk financing for personal or business property, worker's compensation, medical malpractice coverage, and a number of other forms of financial protection.
Insuranceopedia explains Alternative Risk Financing Facilities
Alternative risk financing facilities were originally founded because the insurance market failed to meet the needs of certain groups and organizations. These entities have evolved to serve a wide variety of risk financing needs, including insurance that is also offered by regular insurance companies.
The majority of alternative risk financing facilities are located in Bermuda.