FRONTING/ISSUING COMPANY
FRONTING/ISSUING COMPANY – A fronting company is a commercial insurance company licensed and admitted in the state(s) where a risk to be insured is located. The captive contracts with the front to issue its policy to the insured(s). The front then transfers all that risk to the captive and/or reinsurers through a reinsurance agreement known as a fronting agreement. Fronting companies provide various levels of involvement from simply providing the paper for the policies to complete underwriting and issuance. Of course, their fees vary to match the depth of their services. The result is insurance policies issued on admitted paper, but with the risk associated with the coverage retained by the captive.