What is a key function of an agency captive insurance company?

An agency captive insurance company primarily serves to reinsure client risks for a separate insurance company. This structure allows the agency to retain some of the risks associated with their clients while transferring certain portions of those risks to the captive. By doing this, the agency can better manage and control insurance costs while providing tailored coverage solutions to their clients.

The reinsurance aspect is crucial because it enables the agency captive to assume risk from an insurance company, spreading that risk and creating a more stable financial environment for both parties involved. It is a strategic move that allows the agency to leverage its resources and expertise in risk management.

Other options do not align with the primary purpose of an agency captive. Creating insurance policies for public use would be more characteristic of standard insurance companies rather than a captive model, which typically serves specific clients or groups. Managing claims for personal insurance policies and providing health insurance exclusively also do not reflect the core function of an agency captive, as they focus more on risk transfer and management rather than direct service provision to the general public.