A captive insurance company is designed to do what?

A captive insurance company is specifically created to provide insurance coverage for the risks of its parent company or its group of affiliated companies. The primary purpose of a captive is to allow the parent organization to manage its own risk more effectively and tailor insurance policies to meet specific needs that might not be adequately addressed by traditional insurance providers.

Captives are often established by large corporations or organizations looking to gain greater control over their insurance costs and coverage options, which makes option C particularly accurate. This model allows the parent company to leverage its claims experience, manage its risk exposure, and potentially reduce insurance premiums over time.

The other options reflect different functions of insurance entities that do not apply to the captive model. For example, offering insurance to the general public or through an attorney-in-fact indicates a different type of insurance practice not specific to captives. Similarly, providing insurance to other insurers is a characteristic of reinsurance, rather than the primary purpose of a captive insurance company.