Sandy Bigglestone: The Perfect Captive Successor to Dave Provost

Continuity. Experience. Expertise. 3 reasons (among many) for why Vermont is the Gold Standard for captive domicile decisions. The same 3 reasons describe Sandy Bigglestone, who this week was appointed as the new Deputy Commissioner of the Captive Insurance Division. Since the NBA Finals are underway, I’m inclined to say this is a slam dunk choice for everyone interested in captives in Vermont!

The Board, staff and members of the VCIA are delighted that Vermont Governor Phil Scott knew exactly where to turn to lead the division into a profitable future, and we join the entire industry, in Vermont and beyond, in congratulating Sandy. She is hardly a new face to the captive industry, and I hope that she will forgive me when I mention that she is 25 years into her career at the DFR. I said it once and I’ll say it again, Sandy will ensure stability, consistency, and quality that is the hallmark of regulation in Vermont, while also challenging staff and other stakeholders to develop and improve.

L to R: 2022 VCIA Conference Chair Ian Davis, appointed Deputy Commissioner Sandy Bigglestone, and retiring Deputy Commissioner Dave Provost

The upcoming VCIA conference from August 8 – 11 in Burlington offers a great chance for members and other stakeholders in the industry to meet up with Sandy and congratulate her. You can register for the conference here (and don’t forget to book your airfare and lodging soon, they go fast!) “Hot Topics with Dave Provost” on the last day of the conference, with incoming and outgoing Deputy Commissioners, will indeed be a hot ticket!

The upcoming VCIA conference from August 8 – 11 in Burlington offers a great chance for members and other stakeholders in the industry to meet up with Sandy and congratulate her.

Many major captive players enthusiastically received the news of Sandy’s appointment. Here are some snippets.

Vermont Governor Phil Scott: “Sandy has decades of experience in licensing and regulating captives in Vermont, the top domicile in the country. It made sense to look within for the best person to lead the industry and the obvious choice was Sandy.

Sandy’s soon-to-be predecessor Dave Provost: “Sandy will carry on the mission of the captive division and be a thoughtful regulator. She has the experience and skills and new ideas to help guide the industry forward.”

Mary Ellen Moriarty, VP of Property & Casualty at EIIA. “Sandy is a polished professional, goes the extra mile when necessary, and wants to see us thrive. She is the perfect person to guide Vermont.”

“Sandy is a natural leader, and we are happy to have her stepping into this role,” said Interim DFR Commissioner Kevin Gaffney.

Upwards and onwards to the Sandy Bigglestone and the Vermont Captive Industry…see you all in August!

Summer Conference Registration Opens!

Meticulously planning, securing keynotes and hammering out the schedule, we’ve waited all year for this and now the “gates are opened” for our first in-person conference in three years. We can’t wait to gather with the captive industry’s best and brightest this August in Burlington.

Our 2022 Conference is sure to be a memorable one!

We’re officially launched! Please visit our conference registration page to sign up for the biggest and strongest captive insurance event this summer on the global calendar. No matter your experience level, you will find so much in our conference that will develop you professionally and advance your career. We have a full slate of dynamic educational sessions, curated networking and benchmarking events, and an environment conducive for making business deals. Simply put, you are sure to add to you captive knowledge at the 2022 VCIA Conference, and more than that, it will be a triumphant celebration of the captive industry at large. Be sure to follow the #VCIA2022 hashtag on Twitter and LinkedIn.

I should mention (before I enlist you in another conference prize opportunity!) that I highly recommend booking your hotel and travel flight plans as soon as possible in order to avoid any complications. There are rooms still available at the VCIA group rate, but they are going fast, so head to our conference lodging page and be directed to local hotels who carry our group rate.

I’m a horse racing fan and I enjoy placing some modest bets down when I’m at the track. In that spirit, we are expecting a banner year, and as insurance professionals you are all concerned with risk and the odds that something might or might not occur. So, I introduce you to the VCIA version of ‘How Many Jelly Beans are in the Jar?’  I believe that our total attendance count will be 1,048. Are you taking that over or under? My guess includes exhibitors, staff and all classifications of attendees – i.e. anyone with a name badge! Let me know your number, and if I’m the closest, I will make a $50 personal donation to ICCIE (www.iccie.org), the captive insurance industry’s educational non-profit.  If someone beats me, I will make a $100 donation in their name!  We will, of course, also recognize the best prognosticator! Send your guesses to kmead@vcia.com

Need a little help to formulate your guess? Check out our Conference Attendee page to see who has already registered!

How many people will be in attendance at our conference? Take a guess and email Kevin!

See you in August – if not before! 

Captive Insurance and Rugby: Staff Spotlight on President Kevin Mead

Captive Insurance is a bit like rugby. Let me tell you why.

Just three weeks in, and I have quickly learned some truths about the captive insurance industry. Truth number one: how badly it is understood by those outside. Even those that have a knowledge of risk or insurance sometimes seem to shake their heads and mutter darkly when the subject is raised. Truth number two: that external lack of knowledge (or potentially confusion) means that the industry itself is tight knit, cooperative, and friendly.

Over 25 years ago, authors Adam Brandenburger and Barry Nalebuff co-authored a book called Co-Opetition in which they used game theory to suggest that businesses should cooperate to “grow the size of the pie,” and then compete for a larger slice of that enlarged pie.  Seeing the way in which board members and other VCIA volunteers are working together for the benefit of the association and for the industry is almost a case study in what the authors refer to.

“Real success comes from actively shaping the game you play—from making the game you want, not taking the game you find.”

― Barry J. Nalebuff, Co-Opetition

A second thing that has struck me is the number of rugby people there are in the captive industry. And there are similarities! To the uninitiated, rugby looks dangerous, risky, and somewhat unmanaged. To those that know the game, it is subtle, nuanced, athletic, and referred to as “the game they play in heaven.” On the field, rugby players are intensely competitive, but once the final whistle blows the bruises and battles are forgotten and a spirit of camaraderie and mutual support comes to the fore.

So, rugby as a metaphor for captive insurance? Perhaps that is too much of a reach! But my predecessor, Rich Smith, commented to me multiple times that the essence of the VCIA was built around mutual respect, understanding, and a sense of all being in the same league—if not all on the same team.

For me, rugby season is about to start up. This Saturday, the 19th, I will be refereeing at a tournament put on by the University of Vermont women in Burlington. Feel free to check this out or any rugby game in your location and see if my comments on the similarities hold any water! 

Rich Smith’s Last Blog Post as VCIA President

Bon Voyage, Rich!

“Goodbye Always Makes My Throat Hurt” – Charlie Brown

This is my last blog as President of VCIA. I can’t tell you all what a delight and how meaningful the last 12 years has been for me. I have worked with such wonderful people and made truly great friends in the captive industry.

I remember in my first year as President the marvelous Tom Jones came up to me at an event. With his wry smile and baritone voice, he said to me, “Rich, the only thing you need to be aware of is that there is a ‘no a-hole’ rule in the captive industry.” I immediately laughed out loud but recognized over the years how true that is (OK, it’s not quite universal, but close enough!).

I have worked with such wonderful people and made truly great friends in the captive industry

Outgoing vcia President Rich Smith

With a deep sense of relief, I confidently know I am leaving VCIA in excellent hands. Kevin Mead brings a wealth of association experience along with great common sense and a wonderful sense of humor – all tools that will make VCIA continue to shine.

Rich and Vermont Governor Phil Scott

I want to thank all of you that have provided me with your wisdom, guidance, and friendship. It has meant the world to me. That is especially true of the 36 board members, past and present, that have given their time and energy to this great association – thank you so much. You are the superstars of the captive universe!

To have worked with the outstanding regulators at Vermont’s Department of Financial Regulation these past 12 years has been an honor and a pleasure. The team lead by Dave Provost, Sandy Bigglestone, Dan Petterson, and Christine Brown is the reason Vermont is THE top captive domicile in the world. This may sound like bluster, but I am quoting what my colleagues representing other domiciles told me on a regular basis. Not only that, but Vermont DFR is certainly the nicest and fun-loving group of regulators you have ever met.

Rich and colleagues at the US Capitol Building

Most of all, a warm thank you to all the wonderful VCIA staff over my tenure that have made the Association the stellar organization it is (and made me look good to boot): Diane Leach, Peggy Companion, Janice Valgoi, Megan Precourt, Dave Rapuano, Elizabeth Halpern, Julie Brown, Barbara Casanova, and newcomer Francis McGill – you all rock!

I look forward to watching the Association thrive over the next many years. Please feel free to reach out to me to say “hi’ once in a while and I will do the same. My new email address is mykasmithvt@gmail.com.

Thank you all and I look forward to hearing from you.

The Results Are In

You all saw it coming. The number of captives licensed in Vermont last year eclipsed 2020 – already a banner year. Sure, almost every captive domicile had a good year, but even with over 40 states establishing captive laws, Vermont stands head and shoulders above.

Here are the hard numbers: Forty-five new captive insurance companies were licensed this past year in Vermont, making 2021 Vermont’s 4th highest year of growth in its 40-year history. Vermont is now home to 620 licensed captives, consisting of 589 active and 31 dormant captives. Vermont’s 52 sponsored cell captives currently host nearly 500 cells and separate accounts, in addition to the licensed captive companies.

The new captives were licensed in 17 different industries, the main industries being healthcare, real estate, manufacturing, insurance, and transportation. At least 5 of Vermont’s new captives in 2021 were formed by companies with international roots, including Japan, Germany, Russia, the United Kingdom, and Australia. Vermont has been experiencing growth in the number of new cells within sponsored captives, at a similar pace as new company licenses, with nine of the 45 new companies formed this year being sponsored cell companies.

Vermont has licensed a total of 1,242 captive insurance companies since 1981 and remains, by far, the largest U.S. domicile for captive insurance and third largest in the world. With an active pipeline of prospective new captive insurance companies already underway for 2022, the state expects continued growth in the coming year.

Thank you and I look forward to hearing from you.

Rich Smith
VCIA President

Happy Holidays!

As we close out the year it is a great time to reflect on the last 12 months – or longer. It certainly has been a challenging year for all of us, but I can say without reservation how grateful I am to have been a part of this great industry for the past 12 years.

The friends I have made as head of VCIA are amazing. All of you have made my job joyful which is not something everyone can say, I know. You all know how fabulous the folks who work in the captive insurance space at the State of Vermont are – truly a pleasure to work with Dave Provost, Sandy Bigglestone, Dan Petterson, Christine Brown, Becky Aitchison, and Brittany Nevins.

VCIA’s Board of Directors day in and day out have provided their time, energy, guidance, and friendship through a year where they had to face many challenging decisions. My thanks to Andrew Baillie, Donna Blair, Joe Carter, Lawrence Cook, Tracy Hassett, Stephanie Mapes, Gail Newman, Jason Palmer, Dennis Silvia, Anne Marie Towle, and Derick White.

And to work with the great staff at VCIA in these tumultuous times has shown me just how wonderful they all are. Thank you so much Diane Leach, Elizabeth Halpern (who leaves us at the end of the year – sniff), Peggy Companion, Janice Valgoi, Dave Rapuano, and Meg Precourt for everything!

Even in these uncertain times, we are looking for a brighter future with 2022 and it gives me such comfort to know what good people there are out there.

Happy Holidays!

Rich Smith,
VCIA President

Hail to 40 Years!

Vermont’s 40th anniversary year of the inception of its captive industry is drawing to a close. Since 1981, Vermont has worked hard to be the top U.S. domicile and continues to strive for excellence. Currently, VCIA is working with Dave Provost and Sandy Bigglestone and their team at DFR to build another captive bill to be introduced into Vermont’s General Assembly.

Over the past two years of COVID challenges, the Gold Standard has never been so apropos as Vermont lead the captive insurance industry in incredible growth and resiliency. I could not be prouder to be a part of this great work.

Brittany Nevins, in her role as Captive Insurance Economic Development Director, has put together a terrific short film highlighting relationships, accomplishments, future goals—and really what it means to be part of the Vermont captive family. I hope you will watch and encourage you to share.

Stay well and see you soon!

Rich Smith,
VCIA President

Back to the Future… with VCIA’s Annual Tax Update!

I hope you all had a wonderful Thanksgiving last week and were able to spend it with friends and family. As we move into the continued uncertainty with COVID, it is always good to take a step back to appreciate and be with loved ones (or ones that at least like you).

One certain thing you can count on this time of year is VCIA’s annual captive tax update webinar, scheduled for December 15 at 2:00 ET. This year we present “Back to the Future” where our esteemed captive tax specialists review 2021’s most significant tax developments and explore the possible impacts of proposed legislative action by the current administration.

Our panel consists of Daniel Kusaila, Partner at Crowe LLP, Chaz Lavelle, Partner at Dentons Bingham Greenbaum LLP, and Brandy Vannoy, Partner at Johnson Lambert LLP. With the help from content advisors Stephanie Brassard of Johnson Lambert LLP and Dana Marino of Innovative Captive Strategies, the panel will provide an analysis of state and federal tax activity from 2021.

Our panelists will also provide an overview of recent, notable court cases and IRS actions. This includes a discussion on “lessons learned “ for large captives from small captive cases and a “fact or factors” segment highlighting key drivers that impacted the decisions made by the courts.

Our tax specialists will be monitoring the current tax landscape through the days leading up to this webinar to ensure the audience receives real-time updates on the state and federal tax environments.

Also, I want to say congratulations to Dave Angus, recently appointed as counsel to the captive insurance law practice at the firm of Paul Frank + Collins in Burlington, Vermont. Dave brings his captive insurance and transactional practice from The Angus Firm to PF+C’s captive insurance team and has been a long-time member (and twice chair) of VCIA’s Legislative Committee. Congratulations, David!

Stay well and see you soon!

Rich Smith,
VCIA President

COP 26

As the world’s leaders conclude their two-week summit in Scotland it is good to see some of the leadership in the insurance industry involved in the most critical issue facing all of us today. Many in the insurance industry are working positively to promote policies that will help mitigate climate change – or at least don’t add to the problem – such as new ESG guidelines for the company, looking at the impact of placing climate risks in their portfolios, new modeling, and reassessing where to invest the huge assets the insurance industry has under management. Reinsurers rank climate change as the top risk facing the global insurance industry, according to PwC’s latest survey.

Climate policy is a risk management system, and the industry needs to provide a comprehensive vision for risk sharing going forward. There are many complex issues to be worked out for both the insurers and their insured for sure, however, a cleared-eyed approach by all parties can get us there.

Innovations like from AXA XL which has launched a tool that maps current and future flood hazards resulting from climate change and integrates the protective benefits of coastal ecosystems into insurance risk models, is a great example of where the industry can lead.

There is a theory in the risk management world, however, that insurance can be seen as a barrier to the kind of innovation needed to tackle the hard nut that is climate change. Providing P&C insurance, or D&O insurance, to a client without concern for the long-term impacts climate change can bring can remove the responsibility from the clients. Adding to this, innovative changes to infrastructure, along with the recent technologies used to build resilience, can be hard to insure as they rarely have claims history. This makes it difficult for the insurance sector to price the risk.

I think the basic principle behind captive insurance will accelerate solutions. With captives, organizations take direct responsibility for their risks – they now own it. The data on how to mitigate climate risk comes from their captive which allows them to be more focused on pursuing resilience at all levels. No longer is there a large, anonymous insurance company obscuring leaders from understanding and acting to better protect their own properties, employees, supply chains, and ultimately shareholders. And captives are innovative. They have the ability to take specific risks for an organization that might be looking at pioneering ways to use new technologies to protect from the impacts of climate change.

I remain hopeful that with a comprehensive and coordinated effort from all facets of society and industry we can turn the corner on climate change. Captive insurance will be part of that solution.

Stay well and see you soon!

Rich Smith,
VCIA President

The People of Washington Have Spoken!

Captive Review reported that Washington State voters rejected a recent law that imposes premium taxes on captive insurance companies licensed in other states that are doing business in Washington State this past Tuesday! When asked to give their views on introducing the 2% premium tax, voters opposed it by a 19 point margin. It was just one of a number of new taxes rejected by voters under the advisory votes on tax increases that must be held under state law.

As you all have heard me say in an earlier post, the Washington State captive law passed earlier this year sets a terrible precedent whereby acquiescing some regulatory oversight by the Washington State insurance commissioner on captives domiciled in other states. Under the legislation, S.B. 5315, captives licensed elsewhere and operating in Washington would be required to pay an initial registration fee of $2,500 and be assessed an annual two percent premium tax on insurance provided to their parents or affiliates for Washington risks.

The reality is that the non-binding vote is unlikely to have an impact – the law will remain in effect unless state legislators vote to repeal the measure, which is unlikely to happen. I don’t think Washington State citizens delved into the issue of the captive tax and, after weighing the strong evidence of its inappropriateness, decided to reject it. No, this was a broad anti-tax vote on several taxation measures in the state, and the captive tax was dumped into a bunch of other unpopular taxes.

That being said, the vote did give me a moment of hope!

Stay well and see you soon!

Rich Smith,
VCIA President