• A dividend is a partial refund of an insurance premium to an insured based on the insurer’s financial results or the insured’s own loss experience. Insurers cannot legally guarantee the payment of dividends. There are two types in the captive arena: the policyholder dividend is paid out to policyholders through the insurance premium process. This is the prisoner’s pre-tax expenses. Shareholder dividends are paid to shareholders of a captive after tax (and then taxed back to the shareholder).