P&CPennsylvaniahard
Under the Pennsylvania Captive Insurance Companies Act at 40 P.S. § 991.2701 et seq., a pure captive insurer is most accurately described as one that:
AWrites only personal auto and homeowners insurance
BIs owned by unaffiliated public shareholders and writes commercial liability
Insures only the risks of its parent and affiliated companies
DFunctions as a public-entity reinsurance pool for school districts
Why this is the answer
The Pennsylvania Captive Insurance Companies Act at 40 P.S. § 991.2701 et seq. authorizes several captive forms. A 'pure captive' is the classic single-parent captive — it insures only the risks of its parent and affiliated entities (and sometimes a defined 'controlled unaffiliated business'). Association, industrial-insured, sponsored, and special-purpose captives have different shareholder and policyholder structures. Captives are commercial-risk-financing vehicles, not personal-lines insurers or public reinsurance pools.
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