8 October 2018Analysis

University of California forms new captive Eureka PCC

The University of California (UC) has received regulatory approval for the formation of a new protected cell company, Eureka Insurance Company PCC.

The new cell captive has been formed in the District of Columbia. It follows the formation of UC's other captives - Fiat Lux and UC Health RRG, a reciprocal risk retention group.

Eureka PCC was established to provide financial and regulatory efficiencies when incorporating new, additional captives to re/insure certain risks emanating from university activities.

UC explained that Eureka PCC will be utilised as the "core company" in a cell captive insurance company arrangement and will not be a risk-bearing entity.

The captive is set to sponsor additional incorporated cell captive insurance companies with which to insure certain risks relevant to UC. The first incorporated cell captive to be sponsored by Eureka will be Eureka One ICC, which may reinsure employee/employer paid life insurance policies to University employees.

UC's captive insurance assets under management came to $0.9 billion for the fical year ending June 30, 2018.

Formed in 2012, Fiat Lux is the single parent captive for the University of California system, which consists of 10 universities, five medical centres, three national laboratories, 280,000 employees and writes over 25 lines of coverage.

US Health RRG is a separate reciprocal risk retention group that has been formed, providing professional liability to physicians at its five medical centres.