Happy St. Patty’s Day!

Rich-LeprechaunSt. Patrick’s Day is one of our first harbingers of spring here in Vermont, although with the snowstorm that passed through a few days ago, one would hardly notice! That being said, having the sun shine early and stay out later makes it all worthwhile.

I just returned from the annual CICA conference in San Diego this week. It’s a great opportunity for me to meet and check in with many leaders in the captive world outside of our own annual conference in August. One highlight was a meeting of the Captive Association Leadership Coalition, or CALC, which (as the name sounds) is a gathering of captive association leaders to explore issues facing the captive industry as a whole.

There are a number of issues facing the captive industry at present. Perhaps the one that has all most concerned is a border adjustment tax proposed by Speaker Ryan. Taxes would apply based on the destination of where goods and services are consumed, rather than where they are produced or where the business has its headquarters.   It is still uncertain whether financial services transactions will be taxable if this proceeds (and it seems likely based on the reports I have heard), with the impact to reinsurance costs estimated to be in the billions. In most other jurisdictions that utilize a similar value added tax (VAT), financial services are exempt due to the unique nature of these transactions. VCIA is working with the same coalition that opposes the Neal Bill on this issue, seeking to insure this exemption applies. We’ll keep you posted!

Thank you all very much, and I look forward to hearing from you.

Rich Smith
VCIA President

Congrats, Dan!

dan-towle

Most of you have heard that Dan Towle has been named to succeed Dennis Harwick as President of the Captive Insurance Companies Association (CICA). Dan has been Vermont’s Director of Financial Services and a fixture in the state’s captive insurance industry since 1999.   Most of you know him as the person promoting Vermont as the premier captive domicile by successfully touting the State’s reputation as the Gold Standard. He has witnessed and been an integral part of the licensing of over 600 captives, more than half of all the captives licensed in Vermont’s history.

VCIA has been partners with CICA over many years teaming up together on issues critical to the captive industry and I wish Dennis the best of luck in whatever he looks to for the next phase! Dan has been a true partner and friend of VCIA during his tenure in Vermont and I am heartened to know that CICA will continue to be under the leadership of someone who knows (and gets) the captive insurance industry, and someone who has been a friend and colleague for many years.

Although his tenure doesn’t start until April, I am heading out to the CICA conference this weekend and look forward to seeing both Dennis and Dan as they begin to transition into their new roles. Good luck, Dan, and bon voyage, Dennis!

Thank you all very much, and I look forward to hearing from you.

Rich Smith
VCIA President

 

Woodpiles

rich-lumberjackIt’s 60 degrees here in Vermont today, not our usual weather by a longshot. I worked from home yesterday and was staring out at my woodpile sitting forlornly. Vermonters have a saying about wood stoves: it heats you twice – once when you stack it and once when you burn it (and for REAL Vermonters it’s four times – cutting, splitting, stacking, burning).

OK, I know what you are saying, how is he going to wrap this into a blog on captive insurance! Hopefully you know by now, I can get inspiration for captives from almost anywhere. Well, here it goes…

Captives are like woodpiles because they provide more than one benefit. Obviously, they are a risk financing mechanism that allows an organization to efficiently manage their risk through claims control, program design, access to reinsurance, manuscript policies, etc. But like a woodpile in winter it can “warm you twice” with other benefits including the opportunity to take advantage of favorable tax treatment and the ability to create a profit center with policies like extended warranties or premiums received from a controlled unaffiliated party, where a third party pays the premium. The third party could be an independent contractor, tenant, supplier or customer.

And just like the site of my woodpile gives me comfort as the snow begins to fall, a captive will give peace of mind to those who take the time and effort to build one. Maybe that’s why captives work so well in Vermont!

Thank you all very much, and I look forward to hearing from you.

Rich Smith
VCIA President

I (heart) New York

i-%e2%99%a5-ny

Finally, some good news! I just heard through Michael Horning from United Educators that the State of New York has revised their cyber regulations for financial service organizations to exclude RRGs if they are licensed in other states. That’s great news as the prospect of RRGs that may be registered in many states would have to try and comport to each state’s cyber regulations would have been a nightmare.  This also sets a good precedent as the NAIC continues to trundle down the path of creating model cyber regulations for the insurance industry. We will continue to work with Dave Provost of Vermont’s DFR and our other partners to manage the impact of this issue as moves forward. Click here to view the new cybersecurity requirements for financial services companies.

Don’t forget: VCIA is hosting a one-hour webinar on February 22nd entitled “TRIA Data Collection for Captives”. Our panel of specialists will explain how this requirement affects captive insurance companies and discuss the important latest developments. Register now at the link below. This session is designed to make the filing process more understandable to all parties involved. CPE / CLE / ICCIE credit for participation is offered as well.

Register now!

Thank you all very much, and I look forward to hearing from you!

Rich Smith
VCIA President

Cleveland Rocks!

hair-bandVCIA had another great turnout in Cleveland for our world-famous Road Show that we like to take across America. Cleveland is always a terrific venue for us with so many great companies and non-profits situated in Ohio.

Pattie Henderson, from SRS, brought her extensive knowledge and abundant sense of humor to the first panel with our usual lineup of Dave Provost and Dan Towle. Our second panel featured Team Barbara: Barbara Rhoades, CEO of Ohio Transit Risk Pool and the President of Transit RE out of Wadsworth, and Barbara Thomas, CEO of Kendal at Oberlin & Kendal Northern Ohio out of Oberlin, each providing their stories about the formation of their captives and experiences through the process. Probably my favorite line of the day was Barbara Rhoades talking about her bus drivers alerted to “high pedestrian days” when jay-walkers abound. Thank you, Barbaras and thank you, Cleveland!

Don’t forget: the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015) mandates the collection of data from insurers and associated reporting to the U.S. Treasury Department related to the effectiveness of the Program. The filing deadline to provide the data to Treasury is currently May 15th of this year (there has been some discussion from Treasury about further postponing the deadline). Fear not! VCIA is hosting a one-hour webinar on February 22nd entitled “TRIA Data Collection for Captives”. Our panel of specialists will explain how this requirement affects captive insurance companies and discuss the important latest developments. Register now at the link below. This session is designed to make the filing process more understandable to all parties involved. CPE / CLE / ICCIE credit for participation is offered as well.

Register now!

Thank you all very much, and I look forward to hearing from you!

Rich Smith
VCIA President

A Big Shout Out!

leg-day-2017

Left to right: VCIA President Rich Smith, Governor Phil Scott, VCIA members

As I wrote about in last week’s blog, VCIA hosted our annual Member’s Legislative Day in Vermont’s state capital, Montpelier, yesterday and it was a big success!

Our members, including many who came in from afar, got to hear from Vermont’s new Governor, Phil Scott, at our luncheon, and then later in the day from the new Speaker of the House, Mitzi Johnson, the new President of the Senate, Tim Ashe, and finally from the new Lt. Governor, David Zuckerman. The interesting thing to me is we have a group of state leaders with a wide variety of backgrounds:

  • a Republican Governor who was a construction company owner and stock car racer;
  • a Progressive Lt. Governor who is an organic vegetable farmer;
  • a Democrat/Progressive Senate President who is a non-profit housing developer;
  • and a Democrat Speaker who also does non-profit work and works on a vegetable farm (go figure).

What they do have in common besides their unwavering support of the captive insurance industry in Vermont, is their willingness to work with each other across party lines to do what’s best for our small state – nice model for the rest of the country, don’t you think?

Besides the meetings with the State’s policy leaders, VCIA testified before House Commerce and Senate Finance on the captive bill that was introduced last week and to provide an overview of VCIA and the captive industry. Joining me was VCIA’s board vice chair, Jan Klodowski, who is vice president for Agri-Services Agency, LLC, a subsidiary of Dairy Farmers of America. Jan is responsible for developing and administering their successful Captive/Alternative Risk Financing Programs and manages Agrisurance Inc. which is a Group Captive specializing in the agricultural industry.  Jan did a great job of taking the vague concept of captive insurance and making it relatable by connecting it with the protection of farmers across Vermont and most of the US.

And lastly, a huge shout out to Dave Provost, Len Crouse and Ed Meehan’s family (Ed was given the award posthumously) All three were recently installed as part of the first inductees into Captive Review’s newly formed Captive Hall of Fame.  The Vermont legislature did a surprise proclamation honoring all three in the House chamber yesterday. It was truly terrific to see a standing ovation in the Vermont House of Representatives for Len and Dave who were in the gallery. Congratulations!

For a copy of the captive bill, please go to:
http://www.vcia.com/Portals/0/Files/Board/FullCaptiveBill2017.pdf

Photos will be posted on the VCIA site early next week!

Thank you all very much, and I look forward to hearing from you

Rich Smith
VCIA President

It’s a Golden Dome Day

vermont_state_house-webEvery January VCIA hosts our annual Legislative Day in Montpelier, Vermont, the coolest state capital in the country. It’s a chance for our members to meet the State’s top political leaders and hear about the issues that are facing Vermont in the upcoming year. It’s also a great chance for the captive industry to say “thank you” for the over 30 years of support from politicians and policy leaders from all stripes: Democrats, Republicans, Progressives and Independents.

This special event, for VCIA Members only, includes the VCIA Quarterly Board Meeting, lunch with the Vermont Governor-elect Phil Scott and special guest speaker Chris Graff, meetings with legislative leaders and presentations to House and Senate committees. And don’t miss the Q&A opportunity with Dave Provost and the DFR Team after lunch! The event concludes with a fabulous evening reception where legislators, elected and appointed officials and VCIA Members mingle and exchange information about Vermont’s captive insurance industry and make plans for its continued success in 2017.

So, if you haven’t done so already, register here for a great day:

Click here to Register for 2017 Legislative Day!

Thank you all very much, and I look forward to hearing from you!

Rich Smith
VCIA President