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The loss fund is the financial heart of a captive insurance program. It is the pool of assets set aside to pay claims. Maintaining an adequately funded loss fund — and knowing in real time whether you’re on track — is the primary financial management responsibility of the captive manager. OpenInsure provides real-time loss fund monitoring, stop-loss layer tracking, solvency threshold alerts, and actuarial projection tools.

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Loss Fund Components

The loss fund balance at any point in time is: 
Loss Fund Balance =
    Premium Contributions (collected YTD)
  + Investment Income (YTD)
  - Claims Paid (YTD)
  - Operating Expenses (captive management, actuarial, audit fees)
  + Stop-Loss Recoveries Received (YTD)
These components are maintained in the loss_fund_ledger table and updated in real time as transactions occur. The Loss Fund balance is backed by TigerBeetle account type LOSS_FUND (code 6). When a claim payment is issued, the ledger debits LOSS_FUND and credits CLAIMS_PAID (code 7). Subrogation and salvage recoveries credit back to LOSS_FUND. Reinsurance recoveries (stop-loss or treaty) debit REINSURER_PAYABLE (code 9) and credit LOSS_FUND. TigerBeetle is the authoritative source of truth for the fund balance; the loss_fund_ledger SQL table in PlanetScale serves as the reconciliation record.

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Funded Ratio

The Funded Ratio is the primary solvency metric for a captive: 
Funded Ratio = Loss Fund Balance / (Case Reserves + IBNR)
A funded ratio of 1.0 (100%) means the captive has exactly enough assets to cover all known and estimated future claims. Most captive managers target 110–130% to maintain a solvency buffer. 
GET /v1/captive/:orgId/loss-fund?asOf=2025-06-30

# Response:
{
  "asOfDate": "2025-06-30",
  "lossFundBalance": 1840000,
  "components": {
    "premiumsCollected": 1250000,
    "investmentIncome": 38500,
    "claimsPaid": 412000,
    "operatingExpenses": 62000,
    "stopLossRecoveries": 25500
  },
  "caseReserves": 685000,
  "ibnrReserves": 290000,
  "totalLiabilities": 975000,
  "fundedRatio": 1.887,
  "fundedPct": 188.7,
  "solventAboveThreshold": true,
  "minimumCapitalRequired": 250000
}

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Solvency Thresholds

OpenInsure monitors three solvency threshold levels:
LevelFunded RatioAction
Healthy≥ 130%No action
Watch110%–129%Notification to captive manager
Warning90%–109%Notification to captive owner + regulator contact alerted
Critical< 90%Automated alert to captive manager, owner, and domicile regulator; new business restricted
Insolvent< 100% and < minimum capitalEmergency protocol; new business halted
When the funded ratio drops into Warning or Critical territory, a SOLVENCY_ALERT event is triggered: 
{
  "eventType": "SOLVENCY_ALERT",
  "orgId": "org_01J8...",
  "level": "WARNING",
  "fundedRatio": 0.97,
  "lossFundBalance": 945000,
  "totalLiabilities": 975000,
  "deficit": 30000,
  "recommendations": [
    "Consider additional member contributions or special assessment",
    "Review open reserves for potential redundancy",
    "Verify stop-loss attachment has not been incorrectly calculated"
  ]
}

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Stop-Loss Layer Tracking

Captives almost always purchase stop-loss reinsurance to protect against catastrophic losses. OpenInsure tracks stop-loss erosion in real time.

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Stop-Loss Types

Specific Stop-Loss (Per-Occurrence) Protects the captive when a single claim exceeds the retention threshold. For example, with a $100,000 specific attachment:
  • Claims below $100,000 are 100% retained by the captive
  • Claims above 100,000—theexcessover100,000 — the excess over 100,000 is recovered from the stop-loss carrier
Aggregate Stop-Loss Protects the captive when the total of all retained losses exceeds the aggregate attachment. For example, with a $750,000 aggregate attachment:
  • Once total retained claims paid exceed $750,000, further losses are recovered
GET /v1/captive/:orgId/stop-loss/erosion?year=2025

# Response:
{
  "captiveYear": 2025,
  "specific": {
    "attachment": 100000,
    "claims": [
      { "claimId": "clm_01J8...", "totalIncurred": 185000, "retained": 100000, "ceded": 85000, "recovered": 85000 },
      { "claimId": "clm_02J8...", "totalIncurred": 67000,  "retained": 67000,  "ceded": 0,     "recovered": 0 }
    ],
    "totalCeded": 85000,
    "totalRecovered": 85000
  },
  "aggregate": {
    "attachment": 750000,
    "totalRetainedLosses": 612000,
    "erosionPct": 81.6,
    "remainingBeforeAttachment": 138000,
    "projectedAttachmentDate": "2025-10-15"
  }
}
:::caution When aggregate stop-loss erosion exceeds 75%, OpenInsure automatically alerts the captive manager and triggers a notification to the stop-loss carrier. Most stop-loss contracts require advance notice before attachment. :::

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Running a Loss Fund Projection

The projection tool models future loss fund balance under several scenarios: 
POST /v1/captive/:orgId/loss-fund/projection
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "asOfDate": "2025-06-30",
  "projectionEndDate": "2026-12-31",
  "scenarios": [
    {
      "name": "BASE",
      "assumedLossRatio": 0.65,
      "premiumGrowthRate": 0.08,
      "investmentYield": 0.045
    },
    {
      "name": "ADVERSE",
      "assumedLossRatio": 0.90,
      "premiumGrowthRate": 0.05,
      "investmentYield": 0.04
    },
    {
      "name": "CATASTROPHIC",
      "assumedLossRatio": 1.20,
      "premiumGrowthRate": 0.00,
      "investmentYield": 0.04,
      "additionalShock": 250000
    }
  ]
}
Response includes monthly balance projections, funded ratio trajectory, and the date (if any) when the funded ratio is projected to drop below the warning threshold.

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Annual Loss Fund Analysis for Domicile Filing

Most captive domiciles require an annual actuarial review of the loss fund. OpenInsure generates the supporting data package: 
POST /v1/captive/:orgId/loss-fund/annual-report
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "year": 2024,
  "format": "PDF",
  "includeComponents": [
    "PREMIUM_SUMMARY",
    "CLAIMS_PAID_BY_LINE",
    "RESERVE_DEVELOPMENT",
    "IBNR_ANALYSIS",
    "STOP_LOSS_SUMMARY",
    "FUNDED_RATIO_TREND",
    "INVESTMENT_SCHEDULE"
  ]
}
This report is formatted for submission with the domicile’s annual actuarial certification. It does not replace the actuary’s opinion — it provides the underlying data that the actuary signs off on.

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Investment Income Tracking

Loss fund assets are typically invested in conservative fixed-income instruments. OpenInsure tracks investment income: 
POST /v1/captive/:orgId/investment-income
Authorization: Bearer <admin_token>
Content-Type: application/json

{
  "period": "2025-Q2",
  "income": 9625,
  "beginningBalance": 856000,
  "endingBalance": 865625,
  "yield": 0.045,
  "investmentManager": "State Street Global Advisors"
}
Investment income is added to the loss fund balance and factored into the funded ratio calculation.