A Nice Little Holiday Gift from Congress

statehous-with-bow

As reported by Business Insurance on December 13th, the House Financial Services Committee adopted legislation that aims to preserve the U.S. state-based system of insurance regulation and gives Congress greater oversight and transparency on international insurance standard negotiations.

As beneficiaries of the strong, state-based insurance regulatory framework, the captive insurance industry applauds the goal of this legislation. The bill was introduced in response to concerns expressed about the covered agreement signed by the United States and the European Union to address the U.S. lack of equivalency related to the bloc’s Solvency II directive for the insurance industry. Although we supported the covered agreement in terms of trying to create parity between jurisdictions, the NAIC objected to what they believe to be a lack of transparency and consultation with state regulators on the issue.

As reported in BI, the bill states that entities representing the United States may not agree to insurance-related international agreements unless they are consistent with and recognize existing federal and state law, particularly on the regulation of insurance. U.S. federal entities participating in negotiations would be required to coordinate and consult with state insurance commissioners, according to the bill.

Whether this bill gets enough immediate traction to pass in the next year remains to be seen. I think it does bode well that Congress reiterate the near supremacy in states regulating insurance (I say “near supremacy” because Congress can always change its mind!).

Thank you and I look forward to hearing from you.

Rich Smith
VCIA President

Well, hello Molly!

asdf

Former VCIA President, Honorary Member, and all around wonderful friend, Molly Lambert stopped by our offices last week, and, as many of you know, she is Vermont’s most respected community servant. Molly is doing a little work for a local affordable housing organization here in Burlington, Champlain Housing Trust, and it just so happens the stars align that bring the world of captive insurance and affordable housing.

This past year, the Vermont General Assembly passed an amendment in a housing bill that added captive insurers as a listed group that can take advantage of a tax credit that supports affordable housing. Currently banks and traditional insurance companies can take advantage of the credit. This change was welcome by both the Governor and legislature, as affordable housing is a priority for both.

CPA Mutual Insurance Company of America Risk Retention Group is the first captive insurance company to take advantage of Vermont’s Affordable Housing Tax Credit program. The captive purchased credits from the Champlain Housing Trust who will use the proceeds to create permanently affordable homes in Essex, Vermont.

CPA Mutual’s captive management company, Strategic Risk Solutions, worked with VCIA and the Vermont Department of Financial Regulation to bring the initiative to the legislature. The purchase of the tax credits will provide a reduction in state tax liability spread out over the next five years, while providing a lump sum up front for Champlain Housing Trust to subsidize four condominiums for sale in its shared equity program.  The revenue from the sale of the credits will subsidize the purchase of the homes. In exchange for this down payment assistance, buyers agree to share any market appreciation if they decide to sell at a future date.

William Thompson, president of CPA Mutual, commented: “This was an easy decision for us. To play a role in increasing the availability of affordable housing in Chittenden County is critical right now, and investing in the tax credits makes good business sense, too.”

Just like Molly to be on the side of good community and good business!  Thank you and I look forward to hearing from you.

Rich Smith
VCIA President

Old Home Week

Road-show-2017

As many of you know, VCIA hosts a couple of educational sessions in different cities across the country to espouse the virtues of captive insurance. We call these our World Famous Road Shows, well, because the Ringley Brothers Barnum & Bailey Circus is no more! It is an afternoon that focuses on the basics of captive insurance companies, including the reasons for formation, the feasibility process and key issues in putting a successful captive program together.  A brief overview of Vermont as a captive domicile is also discussed.

It hit us late last year that we have never brought our Road Show to our Homeland – the Great State of Vermont! So next Wednesday, October 25th at the Burlington Hilton we will presenting the Road Show for companies in Vermont (and neighboring regions), as well as enticing finance, business and accounting students from local colleges to come learn about this great industry in their backyard.

We will have Vermont’s chief regulator, Dave Provost on a panel with Rusty Young, a Shareholder at Burlington law firm Primmer Piper Eggleston & Cramer, PC. The panel will be moderated by Ian Davis of Vermont’s Department of Economic Development. I will host the second panel of two of the industry’s experienced captive owners. Jan Klodowski is vice present of Agrisurance Inc. and is responsible for developing and administering their successful Captive/Alternative Risk Financing programs. She manages Agrisurance, Inc., a Vermont-domiciled Sponsored Captive focused on service the farming and agricultural industry. And Wilda Seymour, the corporate director of Professional Liability for the University of Pennsylvania Health System and vice president, Franklin Casualty Insurance Company, their Vermont-domiciled captive.

Hope you can join us to get a better idea why Vermont is the #1 captive domicile in the United States!

One last thing – we need your input! Today is the deadline to submit topics for VCIA’s annual conference next August. Please click link below to submit a conference topic suggestion:

http://conta.cc/2uY3JFL

 

Thank you and I look forward to hearing from you.

Rich Smith
VCIA President