Sedgwick forms Tennessee-domiciled captive

Sedgwick Claims Management Services Inc. has formed Fusion Insurance LLC, a Tennessee-domiciled captive insurer.

Fusion will initially be used to fund Sedgwick’s employee benefits and medical stop loss coverage, David Arick, managing director, global risk management, at the Memphis, Tennessee-based third-party claims administrator, said in an interview.

Stop loss insurance is purchased by employers that self-fund their employee benefit plans.

“Stop loss coverage is increasing in price, potentially resulting in lack of value, so we want to look at how to mitigate that,” Mr. Arick said.

As various programs come up for renewal, additional coverages may be added to the captive, he said.

Fusion, a single-parent captive structured as an LLC, formed Jan. 1.