Enterprise · DLRP
A Deductible Loss Reimbursement Policy, explained without the brochure.
What it actually is
You buy a commercial policy with a large deductible — say $500,000 per occurrence. Because you are absorbing the working layer, the carrier's premium drops sharply: its expense and profit loading stops applying to the losses you were always going to pay.
Then a captive insurance company that you own writes a Deductible Loss Reimbursement Policy back to you. When you pay a deductible on a covered claim, the DLRP reimburses you for it. The layer is now financed by an insurance premium paid to a regulated insurer rather than by money sitting in your operating account.
Why the fronting policy stays
This is the part most explanations skip. The admitted policy is not vestigial. It is the thing that produces the certificate of insurance your landlord, your enterprise customer, your lender and a state regulator will accept. A captive cannot issue that certificate. A foreign parent's group programme cannot issue that certificate. The fronting carrier issues the paper, files it, and stands behind it publicly; your captive sits behind the fronting carrier and takes the economics.
That is what "market access" means in practice, and it is the reason a technology company or a global concern engages us before it signs a lease rather than after.
What you are trading
| You gain | You give up |
|---|---|
| The underwriting result of your own experience, in a good year | The volatility of a bad year, which now sits on your balance sheet |
| A deduction when premium is paid, not as losses settle over years | Collateral — usually a trust or a letter of credit against the retained layer |
| Investment income on your own loss fund and capital | Statutory capital tied up in the vehicle |
| Direct access to reinsurance markets for the layer you retain | A real annual running cost: management, actuarial, audit, tax, board |
| The ability to write lines the commercial market prices badly for you | Regulatory obligations in a domicile, forever, including examinations |
We will tell you when the trade is not worth making. The structuring model refuses to recommend a captive it cannot justify on your numbers, and at smaller loss volumes it routinely says "fund the layer from cash for now."
Nationwide, and what that requires
A DLRP programme is only useful if it works in every state you operate in. That means admitted fronting paper filed in each of those states, surplus-lines placement where no admitted market will write, state-by-state certificate and endorsement wording that actually satisfies your contracts, and workers' compensation handled state by state because it is a state-specific product. We build the schedule before we quote it.
Section 831(b), plainly
If total captive written premium is at or below $2,900,000 for 2026, the captive may be able to elect under section 831(b) to be taxed only on its investment income. Whether that election is available to you turns on risk distribution and ownership, and it is a question for your tax counsel — not for a website and not for a spreadsheet. We model it, we flag it, and we do not opine on it.
Model your own numbers
The engine compares guaranteed cost, a large deductible funded from cash, and a large deductible with a DLRP into a captive, and shows every line on all three — including the lines that argue against the structure we sell.
Open the structuring model Captive management
Not legal, tax, accounting or actuarial advice. Insurance offered through licensed agents. IronKey Care is an independent insurance agency, not an insurer. Availability and eligibility vary by state.