☰Fronting is an arrangement where a licensed commercial insurer issues the policy and your captive reinsures most or all of the risk behind it. The insurer's name is on the policy; your captive's capital stands behind the outcome. Programs use fronting when a policy must come from an admitted, rated insurer, which is common for auto liability and workers' compensation, or when counterparties like lenders, landlords, and customers require certificates from a rated insurer.
Fronting has real costs: the fronting insurer charges a fee and typically requires collateral. Both are worth challenging rather than accepting by default, since depending on the lines and the structure a front is sometimes avoidable entirely, and the difference drops straight into program economics. Whether a program needs one is a structural question the feasibility study answers.