Go, Len!

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Len Crouse, shown here during his time as Deputy Commissioner of Vermont Captive Insurance

It’s officially summer in Vermont and things are getting hot – and I’m not necessarily talking about the weather. As most of you know, VCIA is hosting the “World’s Best Captive Conference” this week in Burlington (and yes, I have trademarked that!) and I am sure you are all making plans to join us.

I wanted to take the opportunity to congratulate Vermont’s own Len Crouse for making Best’s Review list of Key Influencers! As most of you know, Len was head of Vermont’s captive division during the heady days of growth for the State’s captive industry. As the piece rightly points out, he helped set the “gold standard” for Vermont and the industry as a whole when it comes to captive regulation. Len joins luminaries such as Hank Greenberg, Brian Deperrault, and Ajit Jain of Berkshire Hathaway. Congratulations Len – well deserved! And don’t miss Len speaking at the VCIA conference on the panel Group Captives Take Center Stage.

Thank you all very much, and I look forward to hearing from you and seeing many of you this week!

Rich Smith
VCIA President

 

The Power of Risk Managers

blogcapitolEarlier this week, RIMS (the Risk & Insurance Management Society Inc.) held their annual “RIMS on the Hill” legislative summit in Washington DC. RIMS is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities of more than 11,000 risk management professionals.  At the RIMS 2016 Legislative Summit, members from across United States held 70 meetings with legislators and Congressional staff focused on three legislative initiatives: proposed legislation on cyber security, ADA protection and tax treatment for captives.

Thanks to the hard work of VCIA’s Washington counsel, Jim McIntyre, RIMS highlighted their support for the Captive Insurers Clarification Act, S. 1561, introduced by Vermont Sen. Patrick Leahy and South Carolina Sen. Lindsey Graham on the behalf of the captive insurance industry. As most of you know, the bill would officially omit captive insurers from the Nonadmitted and Reinsurance Reform Act. The act failed to explicitly exclude captives from the definition of “nonadmitted insurers,” which leaves insureds unclear on whether independent procurement taxes on the insurance purchased from their captive must be paid to their home state in addition to the captive domicile.

Having the preeminent risk managers organization make the captive bill one of their top three priorities is, well there is no other way of saying it, “HUGE”! Because they represent the risk managers from such a variety of important organizations, Congress listens. Let’s hope Capitol Hill will do more than pay heed; but act!

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

Rich Smith,
VCIA President

Come One, Come All!

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The VCIA Annual Conference is NOT just for VCIA Members and the folks here in Vermont. Last year we had nearly 1100 people in attendance, from 42 states and 8 countries, including several captive regulatory teams (and captives) from many of our favorite competing domiciles.

Around 28% of our attendees were captive owners, a fact that makes VCIA very proud. So if you want to hear from and network with the very best and brightest experts in the industry including captive colleagues from all around the world, you should sign up today for VCIA 2016! This event can’t be missed.

Come get educated, network, and enjoy the Vermont summer on the shore of Lake Champlain. Come one, come all! August 9 – 11, 2016!

 Thank you very much, and I always enjoy hearing from you.

Rich Smith,
VCIA President

Lemonade

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It’s just like the insurance industry to be up with the hipness of Beyoncé. As most of you have heard, Queen Bee just released “Lemonade”, her sixth studio album on April 23, and its originality and boldness have created quite the buzz. But preceding this pronouncement was the report a few months ago of some of the industry’s biggest players agreeing to back another “Lemonade”, the world’s first peer-to-peer (P2P) insurance company.  Berkshire Hathaway, Everest Re, Hiscox, Munich Re, Transatlantic and XL Catlin have all agreed to reinsure the start-up alongside two as yet unnamed syndicates at Lloyd’s of London.

What does either one of these things have to do with captive insurance?  Well, other than getting a chance to use Beyoncé’s picture legitimately for my blog, the P2P insurance company Lemonade might have a spill-over effect for captives. As traditional carriers get further squeezed by consolidations, non-existent returns, and now competition from this type of disruptive product, the more competitive they will become to capture (or recapture) business lost to the captive industry.

The company has been relatively secretive so far about the exact nature of its offering. But with its reinsurance partners now in place, a full consumer launch is  ready for the coming months.  They have been guarded on exactly how its offering will work–simply stating that it will harness the power of behavioral economics and the sharing economy, delivering to consumers an insurance experience that is instantaneous and un-conflicted.

The flip side of this challenge will be the potential opportunity of some of our more entrepreneurial captive folks to find a place for captives in this new model. The business will work by pooling the premiums of individuals in a similar way that a mutual or P&I club might work. And, in contrast to other peer-to-peer products that have been launched elsewhere, any policy will be guaranteed by the carrier, which will also have the ability to purchase reinsurance.  I know captives don’t get mixed up in the messy world of personal lines, but this may open doors at some level.

Either way, the world of insurance and risk management is continuing to evolve so be ready!

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

Rich Smith,
VCIA President

What’s Up, Doc?

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Janice Valgoi and I are in DC this week for the 2016 PIAA Medical Liability Conference, where we are working the floor spreading the good word about captive insurance. The conference brings together hundreds of professionals who work in insurance and alternative risk transfer, all looking to gain new insights on the global and day-to-day issues facing medical liability.

Today, no industry is changing as quickly or fundamentally as healthcare. At the same time, escalating medical professional liability costs have become a critical issue for health care providers and those seeking to improve health care value and outcomes.  Healthcare continues to be one of Vermont’s most abundant sectors. Currently 96 hospital and doctors’ groups have Vermont Captives, making it the second largest sector for captives trailing manufacturing with 100.

Successful MPL captives can measure the success of hospitals and physician groups in improving the safety of care by the degree to which malpractice asserts for those organizations declined over time. After all, everything else being equal, if safety has improved, the chance of doing harm and being sued should drop.  Further, to the extent a captive is successful at helping its members carry out risk management programs, actuarial assumptions can be modified, and premiums should go down.  Also, since previous premiums were based on old actuarial assumptions, an effective captive should generate a surplus in earnings that can be returned to its members. Save money = save lives!

If you are at the PIAA conference, swing on by to say hello!

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

Richard Smith,
VCIA President

Opening Day!

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Sure, many of you get excited with the coming of spring and opening day of Major League Baseball (which, by the way, has its captive in Vermont and is a valued member of VCIA!), but WE get excited here in Burlington for two reasons:

  1. The snow is finally melted and
  2. VCIA just opened registration for the best captive conference in the world!

After much planning and work by all our wonderful volunteer conference task force members and the intrepid crew here at VCIA, we have “opened the gates” for the captive industry to come to Vermont this August 9th -11th for our 31st annual conference.

Here are some GREAT reasons to come to VCIA this summer:

1. It’s a great source for captive career development and networking; earn CPE / CLE / ICCIE credit

2. Sessions with focus areas for those new to captive insurance, those involved in accounting / finance, operations, and risk management

3.
More advanced sessions than ever before, and expanded educational content

4. Two great keynote speakers: Charles Davis, CEO of Stone Point, and David Pogue, founder of Yahoo! Tech

5. Engaging, fun session formats including a game show, a mock trial, a TED talk style session, panels moderated by trade journalists, interactive technology, and several sessions using case studies for illustration

6. Many captive owner panelists from some of the most prestigious organizations in the world. All the industry’s key players will be at the VCIA Conference

7. New option for a tour of Stowe for your spouse or guest

8. Risk management tour (for captive owners) of the Vermont Teddy Bear Company

9. Connect with other captive professionals and get advice from our conference ambassadors at the “Ambassador Lounge”

10. Relax, learn and have fun with industry peers!

 
If that’s not enough, think of all the clever puns you can make with our “Lights, Camera, Captives!” film-making theme! Registration is now open. Register now to reserve your space at this great event!!

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

Rich Smith
VCIA President

RIMS: remember it’s not a sprint, it’s a marathon…

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Just got back from the insurance marathon, better known as the RIMS conference.  This above is the advice Dan Towle, Director of Financial Services for the State of Vermont, gives all of us who attend and work at the Vermont both. Indeed he is correct – I needed to put my feet up for two days after!  And it can be dangerous: we had to dodge the opening night fireworks when a malfunction sent the projectiles into the audience!

Four days in San Diego doesn’t sound like a hardship, does it? And especially when you have so many great people working with you over the course of the event. Besides Dan, there were a number of folks from the Department of Financial Regulation, including Dave Provost, Sandy Bigglestone, Dan Petterson, Jonathan Spencer (what is that story about a rabbit attacking you again?) and Stacy Alden.  Some of our members staffing the cause were Steve Killoran from Maple Capital, Chris Turley from TD Bank, Bob Gagliardi from AIG Insurance Management Services, and Pete Kranz from Beecher Carlson. Include me, Janice Valgoi from VCIA and the intrepid Maddie Moninghoff from Skillet Design & Marketing and every angle was covered.

RIMS is fun, but also a great way to meet our members who attend and talk to the many folks who are considering a captive. Even though over 10,000 people attend RIMS, Vermont stands out as the place to go to cover captives. Great work everyone!

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

Rich Smith,
VCIA President