“Captives are not ‘financial wizardry’ as the article claims. Rather, they are simply a method for companies to formally fund and self-insure a portion of their risks,” CICA explains.

CICA says its frustration extends to whether it should directly respond to the Times. That course of action would only serve to “give the original story ‘legs,’” says the CICA, which adds that it would be “impossible to correct a story with as many misunderstandings and conceptions as the original story.”

About 30 states within the U.S. and dozens of domiciles throughout the world “have welcomed the formation of captive insurance companies as a vehicle for companies and groups to serve their own insurance needs rather than relying on the commercial insurance market that may or may not meet their needs,” CICA notes.

Each captive domicile “has a set of regulatory protocols designed to evaluate each captive’s financial strength, which almost always includes an independent, state-approved actuarial analysis of insured losses. The history of captive default is almost non-existent and any loss falls on the owners of the captive, not the government,” the statement reads.

Midtown Insurance Co. is listed as a consolidated subsidiary of The New York Times Co. in its 10-Q filing for the U.S. Securities and Exchange Commission, filed Nov. 8, 2007 for the period ending Nov. 30, 2007.

A New York State Insurance Department (NYSID) spokesperson says the Midtown Insurance Co. captive is still viable.