A pure captive is a licensed insurance company governed by its country or state Department of Insurance. A captive writes policies only for its owner or associated third parties. It is a highly efficient risk financing tool for legitimate risk management business purposes.

Captives have existed for over 50 years in the United States, and there are currently more than 6,000 active worldwide. Almost every Fortune 100 and 500 company owns a captive to insure its own risk, and thousands of other businesses enjoy the financial and other benefits a captive structure offers.