There are several types of captives, depending on business need, type, industry, etc.
- Single Parent (Pure) Captive – A Pure Captive or "single owner captive" is owned and controlled by one company and insures only the risks of the parent or the parent's subsidiary operations.
- Branch Captive – A branch captive is an onshore (U.S.) arm of an existing offshore (alien) captive that is licensed in Tennessee to write insurance for its owners and affiliates onshore. The brand is regulated as a pure captive, is taxed only on the branch writings and is required to use an onshore trust for the protection of U.S. policyholders and ceding insurers.
- Special Purpose Financial Captive – A special purpose captive is a reinsurance company that issues reinsurance contracts to their parent and cede the risk to the capital markets by way of a bond issue. It is owned or controlled by a parent company and may only insure the risk of its parent.
- Association Captive – An association captive has two or more owners and is typically owned by members of an industry or trade association. This type of captive is designed to insure the risks of that industry with participation generally limited to members of the association.
- Industrial Insured – An industrial insured captive is one formed to insure the risks produced by a group of industrial entities.
- Sponsored Captive (Protected Cell) – Sponsored captives are a type of rent-a-captive, allowing for assets and liabilities of one captive program to be legally segregated from the assets and liabilities of other captive programs. Sponsored Captives allow an entity to insure its own risks without establishing its own captive structure.
- Risk Retention Group (RRG) – A Risk Retention Group is an entity formed under the federal Liability Risk Retention Act and may write only liability coverage.