How can a captive insurance company be best described?

A captive insurance company is best described as a subsidiary created to provide insurance for its parent company. This describes the structure of a captive insurance company accurately, as it is typically formed by a business to manage its own risk and provide tailored insurance solutions without relying on outside insurers.

Captives allow the parent organization to have greater control over its insurance operations and can lead to cost savings and more precise coverage that meets its specific needs. Unlike traditional insurance models, where risks are spread among many clients, a captive isolates risks for the sole benefit of its parent company. This strategic approach also enables better risk management and may enhance financial stability for the parent organization.

In contrast, the other options describe different entities and roles within the insurance industry that do not apply to the specific nature of a captive insurance company. For example, an independent broker serves multiple clients and works to find coverage from various insurance providers, while an organization that offers policies to the public typically refers to a traditional insurer. A network for agent collaboration does not align with the singular focus and internal nature of captive insurance, which is specifically designed to serve the parent company's insurance needs.