Who is medTRANS Insurance Ltd?

Learn more about what we stand for.


Quick Facts


medTRANS is a domestic captive domiciled in Nevada


medTRANS is a Protected Cell Captive


medTRANS is 100% owned by it’s members


Who can participate

medTRANS is a heterogeneous captive.  Any class of business can join.


Policy types issued

medTRANS’ primary policy type is med stop loss.  It can issue other policy types as well

What sets us apart

medTRANS is a direct writer of med stop loss.  We are NOT fronted by a carrier

Born on

medTRANS obtained it’s license to conduct insurance in March of 2010

even medTRANS has a story!

medTRANS Insurance Ltd. has been operating as an affinity group owned insurance company since 2010. In 2015 medTRANS was redomesticated from Delaware to North Carolina.

Since inception and continuing through September 30, 2016 medTRANS has reinsured medical stop loss policies fronted by various commerical stop loss carriers. The fronted insurance program is referred to as the medTRANS 1.0 program, or simply medTRANS 1.0.

The medTRANS business model eliminates the need for a fronting company to issue medical stop loss policies. In place of a fronting company, protected cells issue stop loss policies directly to employers. Each cell cedes its risk and premiums to the protected cell captive insurance company (the core), which in turn retrocedes pooled risk and premiums back to the various cells. Although this architecture is already commonplace for captive insurance arrangements that cover property/liability risks, this architecture is novel for covering medical stop loss risk. Other captive insurance arrangements that insure medical stop loss risk are sponsored by commercial insurers with their own profit motives, whereas medTRANS steers the profits back to the members.

  • The core retrocedes pooled underwriting profits to the cells on a 24-month initial cycle, then each year thereafter. This approach enables the employer to self fund its employee medical benefits plan to the largest extent that is practical while still enjoying liquidity benefit of protection from the occasional shock of an adverse specific stop loss claim or an aggregate stop loss claim.
  • The core is member-owned but is not a mutual insurance company; members are shareholders. As shareholders, they contribute the risk capital that backs the medical stop loss underwriting, and they also participate in the earnings of medTRANS that are not otherwise retroceded to the cells.
  • Cells are able to cover more layers of risk than are pooled by the core. For example, a cell could write stop loss insurance at a $25,000 specific attachment point yet cede such risk at a $50,000 attachment point, thereby financing more risk of the employer without incurring the transaction costs of pooling it.
  • Cells may issue property/liability coverage types in addition to medical stop loss. The operating business that is affiliated with the cell may want the cell to finance other uninsured risks of the operating business.
  • Membership is made easy by offering each member the flexibility to fund required capital with a variety of instruments: accumulated surplus, surplus notes loaned to the core, shareholder loans borrowed from the core, or stock subscriptions in exchange for capital contributions. This flexibility allows the core to cater to new members case by case.
  • Expense ratios for administrative and sales and marketing expenses are capped at levels that are competitive with commercial insurers. Expense ratios in the medTRANS model reflect greater efficiency than exists within typical captive management service engagements.
Q: As a protected cell captive, what does that mean to my business?

A: Each member will receive their own cell captive within medTRANS.   Each cell must supply Nevada Department of Insurance with all the requirements needed of a captive insurer.   As an owner of a cell captive, you are agreeing to the governance of medTRANS insurance.   Opening a cell captive provides a low cost entry to captive insurance without giving up too much autonomy.   Visually think of medTRANS is the hotel and each cell captive is a hotel room.

Q: How long am I committed to medTRANS if I join?

A: New members are not required to fulfill any minimum time requirements.  A member may depart medTRANS at any point in time or, convert their cell captive into a stand alone (Single Parent Captive).   However, the capital contribution paid by the member must stay in medTRANS for 3 years.   Upon the 4th year anniversary of the member, the capital contribution is returnable in 1/3rds, contingent upon the regulation approval and availability.

Q: What is the capital contribution?

A:  The capital contribution is 25% of the Net Written (assumed) medical stop loss premium paid by the insured.   This amount is regulated and approved by the Nevada Department of Insurance and is subject to adjust upward or downwards at any time.   Capital contribution can be paid by several means: 1) cash lump sum, 2) payable over 12-24 months, 3) letter of credit and/or 4) financed by medTRANS and/or 5) added to underwritten stop loss premiums.   Capital contribution computation is as follows:   Stop loss annualized premium, less excess premium * 25% = Capital Contribution.

Q: What's the difference between a FRONTED captive and a Direct writing captive?

A: “Fronting” is the use of a licensed, admitted insurer to issue an insurance policy on behalf of the captive with the intention to transfer some or all of the risk back to the captive.  Transferring of risk back to the captive is called Quota Share and it is expressed as follows: 90/10 or 100/0 or 50/50, with the first value meaning the captive takes that percentage of risk and the fronting carrier takes the second percentage value.  With a Fronting arrangement, the risk of loss is retained by the captive insurer with an indemnity or reinsurance agreement. However, the fronting company (insurer) assumes all the credit risk since it would be required to honor the obligations imposed by the policy if the captive failed to indemnify it.  The fee load charged to the captive, by the Fronting carrier, can sometimes make captive insurance more costly than a simple commercial policy.

A direct writing captive issues the policy without any association with a commercial carrier.   Start-up captives don’t usually have the financial backing to serve as a direct writer and group captives owned by commercial carriers profit from the fronting fees charged to the captive.   Therefore, a direct writer can sometimes pass along to its members’ additional efficiencies then what a Fronted captive can offer.

Q: Since medTRANS is a direct writer, is it more risky then a fronted captive?

A:  As with any insurance policy, assuring the policy is priced properly (underwritten properly), a direct writing captive can apply the Fronting inefficiencies toward claims funding.   Said another way, if a Fronted policy is priced at $100, what remains to pay claims maybe be dwindled down to $45-$55 after frictional costs are removed.  A direct writing captive can afford to also price a policy at $100, but less is lost to overhead allowing $60-$70 to fund claims.   Even though a fronted and direct wiring captive may charge the same premium, more is used to fund claims AND with medTRANS, overfunding/low loss ratio earns underwriting profits at a faster pace.

Q: What if I sell my business and I have a captive in place?

A:  Your captive is a separate tax ID from the business the captive insures.   When you’re in negotiations with the seller, the captive is an entity which can be sold as well.   The captive is likely to have a business value to you.