VCIA Welcomes Two New Staff Members!

Please welcome Ella Stevens, front left, and Jocelyn Lamb, front right, two new VCIA hires!

Last week, I recapped VCIA’s successful Legislative Day and emphasized just how valuable our legislative advocacy is to our members and to the industry. Well, I offer another VCIA asset that’s just as and if not more valuable…and that’s our tireless staff! VCIA can proudly say we are fully-staffed and able to not only strengthen and grow our association, but meet the needs of our 400+ members. Not many other captive associations can say that. And so please give a warm welcome to Ella Stevens, VCIA’s new Bookkeeper and Administrator, and Jocelyn Lamb, our Accounting Manager! Let’s get to know them.

Meet Ella Stevens, VCIA’s Bookkeeper/Administrator Ella began working with VCIA earlier this month and she’s doing so while completing her last semester at Saint Michaels in Colchester. She will be graduating with an honors bachelor degree in accounting and business administration, and our staff and Board were extremely impressed about how she can handle such a workload while learning and absorbing so much at VCIA. Says Ella: “This is my first professional job out of college and I’m excited to get into accounting on a real-world basis, understand the Vermont captive industry, and interact with VCIA members.” Fun fact? She’s an avid runner and runs at least 3 miles a day every day of the week! I personally can’t say the same…

Meet Jocelyn Lamb, VCIA’s Accounting Manager Where Ella is new to the Vermont captive industry, Jocelyn Lamb is a veteran and has years of experience, thanks to her 11 years at Vermont’s Department of Financial Regulation as an examiner and regulator. We’re lucky to add Jocelyn’s great talents, and she’s extremely happy to stay in the industry. Says Jocelyn, “It’s a wonderful opportunity to work with VCIA and to experience captive insurance from an additional perspective. I really look forward to hitting the ground running with our close-knit staff!” Fun fact? Jocelyn and her family operate a 3,000 tree sugar bush and sell maple syrup each year – you can’t get much more Vermont than that!

It’s a wonderful opportunity to work with VCIA and to experience captive insurance from an additional perspective. I really look forward to hitting the ground running with our close-knit staff!

VCia’s new Account Manager, Jocelyn Lamb

Please be sure to welcome Ella and Jocelyn as you see them in the year ahead; they will be an integral part of accomplishing our goals, not least of which is a successful Annual Conference in August. The work begins now!

VCIA’s Captivated Blog Heads to the Capitol: A Recap of 2023’s Successful Legislative Day

I am not expecting a Netflix development contract to come my way after my TV appearance (well, YouTube – the recordings can be found here and here) testifying before Vermont’s Senate Finance and House Commerce committees, but you never know.  In fact, I was just the ‘warm-up guy’ for the real stars, VCIA Board Chair Tracy Hassett, and the VCIA’s Legislative Committee Chair, Ben Gould.  Tracy had a compelling story about saving millions of dollars for edHEALTH (a member-owned higher education group) through their medical stop-loss captive, while Ben detailed how the legislation that these two committees work on keeps Vermont as the Gold Standard of the industry. Both committees were very receptive to us, and look forward to updating and finalizing a captive bill for 2023. As soon as there is any progress, we will let VCIA members know!

Senate Finance Testimony
VCIA President Kevin Mead in conversation with House Speaker Jill Krowinski during Legislative Leadership meetings

Following committee testimony, VCIA’s legislative advocate Jamie Feehan organized a slate of a Legislative Leadership meetings, where nearly 30 VCIA stakeholders heard from House and Senate Minority Leaders, House Speaker, Lieutenant Governor and the State’s Treasurer on what their priorities are for the legislative session, how the parties work together, and why they will continue to be champions of the captive industry and optimize the legislation that supports it.

But I need to back up!  Before all of this, the VCIA’s Board held a public session where we heard from the DFR’s Sandy Bigglestone and the DED’s Brittany Nevins on the state of the captive industry in Vermont.  41 new formations (another ‘top 10 year’)! This was followed up by an informal lunch, where House and Senate legislators were able to mix with VCIA members and staff and learn about what we do. Attendees also heard comments from DFR Commissioner Kevin Gaffney and DED Commissioner Joan Goldstein, both of whom pledged support for and praised the Vermont captive industry and VCIA. The common question of the day from lawmakers: where can I find the next captive industry for Vermont? We didn’t have an answer, but we responded quite passionately that we will continue to protect and strengthen the actual captive industry in Vermont!

A productive Legislative Day lunch, as a number of new legislators learned about Vermont captives

Headcount restrictions in place at various locations precluded us from having a mass turnout as in past years, but rest assured that this was an effective and informative Legislative Day that we can build on after two years of virtual attendance.

Given that our advocacy work at a federal and state level is always rated as one of our strongest benefits, there’s no better time to become a VCIA Member.

We are starting a series of exclusive member reports with a Legislative Day Document that will share video and specific commentary made by Vermont Legislators, and we plan to deliver it to our members in the next week! If you’re not a member yet, connect with Membership Director Janice Valgoi and make that new year resolution come true by joining us – for we are strength in numbers!

VCIA Fact Sheet distributed to Vermont lawmakers. An exclusive, detailed report of the day will be sent to VCIA members in the near future!

At the Heart of What We Do: 2023 VCIA Legislative Day Preview

When the VCIA surveys members to find out what we do that provides the greatest value, it is our legislative advocacy that usually comes out on top. It is also a defining differentiator for us, as we are the only captive association to have active advocacy in place at both a state and federal level.  Additionally, we closely watch the proceedings at the National Association of Insurance Commissioners (NAIC) as they work on model legislation and standards that will affect the industry. I’m excited to get our advocacy work started this year with our annual Montpelier Legislative Day next week.

It’s our first in-person Legislative Day since 2020 before the pandemic, and the VCIA Board, staff, and legislative committee members are eager to engage with the lawmakers who will eventually finalize, pass and bring our 2023 captive bill to Governor Scott’s desk to sign and put into law.

The schedule of events for the day goes something like this: a Board meeting immediately before the Statehouse activities, with a general session open to the public at the tail end of the meeting; an informal lunch at the classy Capitol Plaza, a stones throw away from the Statehouse. This lunch will be a great opportunity to meet with select legislators and talk to them off the record about what VCIA does and why the captive industry is vital to the Vermont economy.

All our advocacy work has resulted in a ‘spend’ by the VCIA of $1.6M in the last 19 years and is one of the reasons why we consistently live up to the Gold Standard. It is through these efforts that Vermont’s statutes remain industry-leading, and that we have a strong voice in Washington DC and beyond.

Afterwards, we will head over to the golden dome and share official testimony in front of the Senate Finance Committee and then the House Commerce Committee. Board Chair Tracy Hassett will provide her company edHealth’s compelling captive story, explaining why Vermont was their domicile of choice. Legislative Committee Chair Ben Gould of Paul Frank and Collins PC will discuss the process undertaken by VCIA and the DFR in crafting a bill for the legislature to consider and amend. My job will be to tell the VCIA story: how we are the bridge between the Vermont captive regulators and our members and stakeholders; how we serve as in indispensable educational resource for the entire industry; and how we bring major tourism revenue to Burlington and Vermont through our Annual Conference, one of the largest in the state.

Both Senate and House testimony will be livestreamed on the respective Senate Finance and House Commerce YouTube channels. The Statehouse continues to have a visitor policy that prevents us from inviting all of our members; however, to make up for this, we will be providing an in-depth Special Legislative Day report exclusive to VCIA members.

With great turnover within the Vermont legislature after the November 2022 elections, this Legislative Day is an important educational mission that will enlighten new lawmakers on the scope and dearth of the VCIA and the Vermont Captive Industry. We will be providing updated Fact Sheets with the big numbers that back up our claims, while presenting new information to both committees ahead of their consideration of the 2023 captive insurance bill.

I am excited to represent your interests at this, my first legislative day for the VCIA, and I will be sure to keep you informed of all of our efforts in this area on your behalf. Please reach out to me directly with any feedback!

Happy 2023! Let’s Look Ahead with VCIA

Early in the new year seems to be a good time for predictions. Even though my abilities in prognostication may be somewhat limited, I can fall on the guidance and opinions of others to develop some ideas related to both the VCIA and the Captive industry as a whole that might stand a fighting chance of becoming reality.

Firstly, Marsh’s Ellen Charnley, speaking to Richard Cutcher in Captive Intelligence predicted that the just-closing 2022 would be another record year for captive formations, and that this growth, while still being driven by North America, is also global.  Certainly, that mirrors what we have seen in Vermont, with 2022 likely to deliver another year of over 40 formations.  And it seems like the pace is not slowing – owners seem to be seeking a number of things.

  • Speed to market
  • Innovation
  • Stability and reliability

Within the broader insurance market ratings agency, Fitch sees headwinds from inflation and a potentially weakening economy as factors driving a neutral overall assessment.  This was echoed by Swiss Re in their market outlook for 2023/24, in which they suggested that this volatility could cause “rate hardening to regain momentum.”  And while standard wisdom is that a hardening market assists captive growth, this could be tempered by an overall economic slowing.  The opinions of Swiss Re are at slight variance with those of WTW, who comment that “commercial insurance rates (are) rising at a moderating rate.”

Predicting for the VCIA is perhaps a little easier!  Staff and the Conference Task Force are already deep into planning the 2023 VCIA Conference, building on the success of a return to in-person last year.  We will take our first trade mission to Mexico on March 1st, as we seek to support and develop an increasingly sophisticated and growing market there.  A dynamic and involved Board will continue to challenge and inspire us to develop and deliver value for members.

The captive industry has a long history of responding to the needs of clients and potential clients through innovation. Vermont and the VCIA are a part of that, and we look forward to being able to deliver in 2023 and beyond. There are many ways to get involved, and I personally hope you do so with us this year.

Photo Blog of VCIA’s Holiday Mixer!

VCIA Members had blast last night at ECHO Science Museum and Aquarium, right on the Lake Champlain Waterfront with views of the Adirondack Mountains! Great festive atmosphere with personal and captive catch ups interspersed. Thanks for everyone who came out!

Welcome!
Can you guess the fish?
Members could roam freely around the museum!
Thank you Aon! Glad we saw so many of you at the mixer
A happy crowd
Great to see everyone!
Happy faces all around!
VCIA President Kevin Mead was mixing and mingling with all members
A great turnout of young professionals and captive veterans!
Thanks for hosting ECHO!

Our Captive Tax Webinar Will Be Fun. Hear Me Out.

An accountant, an auditor, and a tax lawyer walk into a bar…just kidding, no joke here. But have you ever had fun at a tax seminar? Well I think you just might at our Captive Taxation webinar next week. For real!

For those of you that think that high jinx might be a little lacking as you wade through IRS and state taxes for captives, then we may have the right antidote to put you in the mood for holiday cheer. 

I have been present as Chaz Lavelle and Dan Kusaila have been developing and practicing for next week’s VCIA tax webinar and it has been a total hoot to watch as these two long time thought leaders and contributors to the VCIA combine a review of the arcane backwaters of tax with anarchic humor. 

Perhaps most importantly, they know how to get the information across that you need without drifting and being obscure. If the execution is anything like the prep, it will be a great hour! Enjoy their company, hear some interesting captive tax anecdotes, and learn about what’s ahead for our industry, tax-wise, in 2023. If you haven’t done so, you can still register for the tax webinar here. You won’t be disappointed by Chaz and Dan!

Of course, we have a more typical way to get into the holiday spirit with our annual holiday party the day before the tax webinar.  Over 80 of your colleagues have already registered for this event, and I look forward to meeting friends old and new as we wind down what has been an exceptional 2022 for the VCIA with a great event at ECHO in Burlington. VCIA members can register for their free holiday mixer here.

I hope to see you at these events next week!

VCIA Goes Global

 After a brief break for the Thanksgiving holiday, we’re back to review Vermont’s renewed focus on business not only beyond state borders, but also outside of the US. 

The Vermont team at the European Captive Forum

Just before the Thanksgiving break, a Vermont delegation led by the DFR’s Sandy Bigglestone and including myself and Brittany Nevins as well as representatives from the Vermont professional provider community were present in Luxembourg for the European Captive Forum.  At the awards dinner we were naturally delighted to be named as the international domicile of the year, and beyond that we worked on building and establishing relationships across the captive industry in the EU, broader Europe and beyond.  With companies from outside of the US seeking to explore alternative risk management strategies for the US and Americas holdings, this was a great time for us to present Vermont and our preparedness to work with global business to a broader audience.

Historical landmark National Palace building at Plaza de la Constitucion in Mexico City, Mexico.

Looking forward into 2023, we are building on the international theme as our COVID-delayed roadshow goes to Mexico City on March 1st.  In addition to the roadshow, we are holding multiple meetings with the business, financial and insurance sectors within Mexico as the roadshow expands into a full-blown trade mission. The current lineup of speakers is found below, and Mexican business professionals as well as VCIA members are invited free of charge to this special event. (To register, send your name, title, and contact information to Sylvia.Montano@trade.gov. For questions reach out to Janice Valgoi at janice@vcia.com)

A great coming together of captive minds happens at the VCIA-Mexico Trade Mission, March 1 2023

Vermont already has Mexican companies domiciling their captives here, and as that market both grows and becomes more sophisticated, Vermont is ready to be the domicile of choice for Mexican business. 

Fun fact time – what do Thomas’s English muffins, Lender’s Bagels, CEMEX and Promised Land Dairy have in common – yup, Mexican owned!  Mexico has an economy of $1,150B according to the IMF, making it globally #15, so ahead of Spain, Saudi Arabia and the Netherlands.  For these reasons and many others, Vermont and the VCIA is working to ensure that enterprises in this expanding economy have access to well- regulated and effective risk management tools.

As the year comes to a close, VCIA – its staff, Board members and stakeholders – reflect on where we are and where we are going. I’m confident an emerging theme that will continue to surface in 2023 and beyond is our global reach and how we can serve our worldwide members.

Success Only Fuels Our Motivation

These last few weeks I’ve spent more time in hotel rooms and airplanes than I’ve spent at home. Now, happily snug in my snowy–yes, already–Vermont headquarters, I can reflect on quite a trip the State of Vermont and VCIA had to Luxembourg for the European Captive Forum.

The trip, and the conference, had a perfect combination of networking and educational sessions. Deputy Commissioner Sandy Bigglestone led an engaging topic on “Why and How to Establish a Captive” and the Vermont team heard from stateside and international industry colleagues about opportunities for new captive formations in the Green Mountain State. I was personally happy to hear a recurrent point about how many people are eager for the business possibilities, networking values, and educational content of our annual conference…even if it’s more than 8 months away! Even so, we are already hard at work on creating an optimal experience for our attendees.

The “hard at work” phrase kept in my mind as we learned that Vermont won the International Domicile of the Year during the Captive Review European Awards. The announcement on LinkedIn read: “Moving on to the next category at #EUCaptiveAwards 2022 where we have the International Domicile…And it is of course Vermont who have earned our congratulations!”

I’m still less than a year in as VCIA President/industry representative, so it struck me that the “of course” preposition to describe our award reflects the healthy and productive infrastructure that VCIA and the State has built–and continues to strengthen. That’s why I responded to Captive Review’s post like this: ” ‘Of course Vermont’ is a delightful comment, but rest assured that the industry-leading regulators, service providers and managers, economic development professionals and the VCIA are NOT resting on their laurels as we all further develop the ‘Gold Standard’ that garners awards like these.”

We’re further developing our Gold Standard here at VCIA by starting a Strategic Planning process that will result in a comprehensive and innovative blueprint that will guide us into prosperous future in partnership with our members, stakeholders, and the industry as a whole. Our newly appointed Board Chair Tracy Hassett said it in a nutshell: VCIA will be thinking “blue sky big” in how we can provide more to our members, meet captive owner/industry needs, and increase our impact and reach. So I encourage you to join us. Become a member, join a committee, share your feedback. This is YOUR organization, and the success we experienced at ECF only motivates us to higher ground.

Bookmark this Benchmarking Webinar Happening Next Week!

I can’t tell you how many folks have shared their excitement with me about VCIA’s upcoming Captive Benchmarking Webinar taking place next Wednesday November 16th at 2-3pm EST. It’s been a few years since our last benchmarking program, so it’s high time to update everyone on the health of captive financials in the State of Vermont. This year’s event is gearing up to be one of our most-attended webinars, and you can still get the important data by registering here!

I am lucky enough to moderate a conversation with the above captive financial data wizards, and I wanted to hear from them beforehand why they are excited for next week’s webinar.

With negative year-to-date investment returns reducing both profitability and surplus for captives, it is an opportune time to discuss best practices in benchmark selection for insurance entities that not only considers investment risk tolerances, but also the connection to the risks being underwritten by the captive

Bill piel, President of Institutional Markets, Opus Investment Management

During the webinar, Amy Angell of Milliman, Inc., plans to review surplus levels, identify ways to monitor claims performance, and to evaluate whether risk management programs are having the desired outcomes on the loss experience. She’ll do this all by looking at the hard data of the financial records of the 2021 EOY domiciled captives of the State of Vermont, listed by type of captive and by industry type.

What’s revving her up for next week? She told me point blank: “Benchmarking is a powerful tool that provides meaningful and actionable insights to captive owners.” If you want to start game planning for captive’s financial goals, then there’s no better place to start than our Hot Topics webinar.

Next to Amy will be her accomplished colleagues, Becky Aitchison, Captive Insurance Examiner for the State of Vermont DFR, and Bill Piel, President of the Opus Institutional Markets.

Becky is basically the source keeper the data aggregated and shared annually by the DFR. She will explain the key ratios used by the DFR for the surveillance of your captive’s financial health, and what markers she looks for in determining how a certain captive may or may not be thriving.

From an investment perspective, Bill will let you in on the primary reasons for establishing an investment policy and how the DFR data can help assist with developing an appropriate asset allocation unique to your captive. He will also identify ways to monitor investment performance and evaluate whether results are having the desired impact on your financial statements.

What makes Bill excited for the webinar? “With negative year-to-date investment returns reducing both profitability and surplus for captives, it is an opportune time to discuss best practices in benchmark selection for insurance entities that not only considers investment risk tolerances, but also the connection to the risks being underwritten by the captive.”

So, we have the expert who comes up with the data, and the other experts who will explain how to use the latest data to your benefit. It’s a win win!

I look forward to facilitating a data-driven conversation that looks into how your captive – and the Vermont captive landscape at large – has faired in the last financial year, and what that may say about the future. Remember to register, and “see you” there!

Captive Corner: VCIA Interview Series, 1. Joe Carter

Captive Corner: VCIA Interviews Industry Experts

Joe Carter, VP of Business Development and UE Experience at United Educators, and VCIA Board Member

ue.org / @UnitedEducators / United Educators LinkedIn Company Page

United Educators is a reciprocal risk retention group that provides the insurance coverage needs of more than 1,600 members ranging from large university systems to small, independent K-12 schools. Joe Carter’s responsibility is to set the strategy for UE’s growth. This includes planning the business development and distribution strategies that ensure success. He is also responsible for teams that manage UE’s brand and constituent experience strategy, the Voice of Constituent (VOC) program, digital experience, member support, marketing, and communications. Joe recently was elected to the Board of Directors at VCIA, and we sat down with him to ask a few questions.  

1. Tell us how you got involved with insurance and risk management. How did you come to UE?   The early days in my professional journey were rooted in large commercial insurance companies with fantastic training programs for new employees. I began by handling first and third-party claims in an environment best described as “rapid fire” for America’s second largest insurance company at the time. I had the rare opportunity to rotate through other functions of the company including underwriting, risk management consulting, front-line sales management, and leadership coaching. Then I started an independent insurance agency/brokerage that I grew and sold to a larger agency owned by a regional bank. After a couple of additional executive leadership roles, I found this wonderful Risk Retention Group (RRG) captive that focused on education, a sector that I think is so important to our world. Joining United Educators was a chance to apply all my experiences to lead UE’s business development strategy, marketing, and member experience – a home run opportunity for me.  

2. UE is celebrating its 35-year anniversary. What do you provide your members?   We continue to deliver the third-party liability coverages that drove our creation by educational institutions in 1987. A significant part of our work is delivered well before any claims call comes in. We research and build training, loss prevention courses, and risk management tools that not only help prevent bad things from happening, but also help institutions prepare for bad things that are likely to happen. We are proud that these risk management resources are highly valued and utilized by educational institutions. Our resolutions team partners with institutions as soon as there is a concern about a potential claims matter. They help strategize early, while taking a Cool Head, Warm Heart® approach to resolving claims that recognizes the value of the relationships our members have with their students, staff, and communities.  

All captives need to focus on their differentiation from commercial markets and think hard about why they exist. There needs to be a shared understanding about what captives are really accomplishing for their owners. I believe captives have a unique opportunity to help owners to see risks that lie ahead using trends from a purer set of data and experience.  


3. What have you seen in the time you have been there? Can you tell us a little about the culture at UE?    There are many liability lessons from education claims over the 35 years: preparation is as important as seeking prevention, active and early intervention usually is more effective than the “wait and see” tactics we’ve seen used by other carriers, and treating claimants with respect and empathy is an important part of loss mitigation, to name a few. Our culture is shaped by being member-owned. We’re serving members amid upheaval of the education sector, market fluctuations, and skyrocketing claims and defense costs. Enjoying a personal connection to our members drives an ethos of excellence in member service.  

4. What are some of the challenges you see today for your members and what innovations is UE bringing to them to meet those challenges? We see several challenges that have been pervasive with new ones emerging. In recent years, we’ve monitored how demographic shifts are affecting enrollments and the top lines for many institutions. And we all think about the financial and operational risks going forward for tuition-dependent institutions. There are also real concerns about keeping campuses operating as healthy and safe environments for in-person learning. Most campuses, including K-12 sites, are concerned about student mental health for good reasons. And many are concerned about employee mental health as we transition through the next phase of this pandemic. And there is the ever-present challenge that all employers face in managing risks such as employment and misconduct issues involving high-profile and highly-valued employees. In the education arena, these include coaches, researchers, faculty, presidents, or trustees. UE’s risk research and resolutions teams work constantly to develop useful tools that help break these complex exposures down into tactical and useful programs that help campuses effectively plan and train administrators, employees, and students on staying healthy and safe.  

5. What are some of the challenges facing UE as an organization and the captive insurance/RRG industry as a whole?   UE faces many of the same challenges that most providers do. We are seeing loss inflation that goes beyond just a rise in the average cost of a claim or even a category of claims. The rise in claims costs and awards reflects a societal trend that is punishing institutions of any type without regard to the nexus between bad verdicts and the rising costs of insurance going forward. Insurer investment strategies aren’t delivering much return in recent environments, so there is great pressure to underwrite and price your business accurately and on time. That is a hard pill for owners to swallow during times of rising loss costs. All captives need to do their best job of speaking this truth to their owners. And when we are doing this correctly, owners understand that the captive’s health is directly tied to their ability to manage risks and losses. All captives need to focus on their differentiation from commercial markets and think hard about why they exist. There needs to be a shared understanding about what captives are really accomplishing for their owners. I believe captives have a unique opportunity to help owners to see risks that lie ahead using trends from a purer set of data and experience.  

6. Why does Vermont fit UE’s mission and business plan as your domicile of choice?   I believe that one of the best things that Vermont does for domiciled captives is allowing and encouraging open dialogue. They do a really good job at getting to know the organizations doing business in and around the state. They show up at industry conferences not just to speak and deliver content, but to also listen and learn. That’s a level of engagement that allows them to be helpful to innovation while they ensure compliance. No one wants to see bad captives formed or operating in the market. I believe Vermont’s approach to engagement keeps the marketplace respectable and healthy for consumers of these services.  
All captives have that opportunity to focus forward to give owners more research, more knowledge, more attention, and better service than any other option in the market.

7. What are you most proud of as you look back over the past 35 years for UE?   There are many things that I could talk about. It is impressive how our captive and its membership have grown so much since I joined. The staff I have the pleasure of working with and learning from every day are smart and bring a rich diversity of experience. They work collaboratively and challenge us leaders to think hard, consider much, and act decisively. We’ve also been working hard to foster and improve our culture of inclusivity. I am proud of how our teams contribute in many ways. And we’re just getting started. I know we will continue to grow our culture of diversity, equity, inclusion, and belonging.  

8. Is there anything that we didn’t cover that you wanted to talk about?    I think captive organizations represent the best in business relationships between owner and provider. Being able to do this constituent experience work on behalf of those that you serve just demonstrates a purity in relationship that cannot happen with the influence of third-party shareholders. And all captives have that opportunity to focus forward to give owners more research, more knowledge, more attention, and better service than any other option in the market. In fact, there should really be no better experience available when an effective captive option is present. No other option can to focus and deliver like we do.

All captives have that opportunity to focus forward to give owners more research, more knowledge, more attention, and better service than any other option in the market. In fact, there should really be no better experience available when an effective captive option is present. No other option can to focus and deliver like we do.