Vermont Captive’s Smooth Transition Proceeds: Christine Brown Named Next Director of Captive Insurance

Before we gather for #VCIA2022, a few major changes have been placed on the horizon for the State of Vermont and its preeminent Captive Insurance regulatory team–Mr. Captive himself, Dave Provost, retiring into the sunset; his heir apparent, Sandy Bigglestone, ready to assume the Deputy Commissioner role; and now Christine Brown, respected throughout the industry, promoted to Director of Captive Insurance. All three diligent, hard working, and great collaborators. And all three have spent years making Vermont the Gold Standard for captive domiciles. To me, that’s the definition of a stable “transition of power,” and it will only make more captives flock to the Green Mountain State.

Christine Brown

The official press released arrived in my email on Wednesday and you can read it in its entirety on the Vermont Captive website. The good folks at the State of Vermont quoted me on the appointment of Christine Brown to the position of Director of Captive Insurance at the Department of Financial Regulation (DFR): “The quality and stability within captive regulation in Vermont is proven yet again.  What an awesome choice to have Christine Brown succeed Sandy Bigglestone as the Department of Financial Regulation’s next Director of Captive Insurance. Christine has a long relationship with the VCIA and has served as a thought leader within the industry for many years. All of my colleagues here at the VCIA join me in wishing her the best in this appointment, and we look forward to seeing her in a few short weeks at the VCIA conference.”

And I meant every word of it!  In my short time with the VCIA I have already called in favors from Christine that I had not even built up – and she has always delivered. That Vermont has promoted from within for two critical positions speaks volumes of the talent its captive team has retained and cultivated.

During my 20+ year career in captive insurance, I have had the privilege of working with and learning from the best and brightest in the industry, most recently as Assistant Director supporting Sandy Bigglestone and Dave Provost.  I am honored to have been chosen for the Director position under Sandy’s leadership.  I look forward to continuing to grow and support the industry, together with my amazing colleagues at DFR and our valued industry partners as we promote Vermont’s standard of excellence.

Vermont’s Next Director of Captive Insurance Christine Brown

At this year’s VCIA conference you will find Christine at the State of Vermont booth, #40, and around conference events. She’ll be speaking at Captive Immersion on Monday and will cohost a discussion group on Tuesday. Be sure to connect with her and congratulate her on her well-deserved promotion!

Only 17 days until #VCIA2022 kicks off and I don’t want you or your colleagues, or frankly anyone you know related to the captive insurance industry, to miss out! Please be sure to register on our website here. See you in breezy Burlington in August in just a few short weeks!

Make Sure Your Register Because This Is The Last Call for #VCIA2022 Early Bird Rates!

The Vermont state bird is the Catharus guttatus, more commonly known as the Hermit Thrush. However, the VCIA organizational equivalent is Primo Avis Mandare, for those not up on their Latin–the Early Bird! Leaving just as the Hermit Thrush arrives for its summer visit, the Early Bird’s call is ‘cheaper, cheaper!’ If you’re not quick you will miss its beautiful song because this seasonal visitor departs in just 6 days, having been seen by over 500 people. Primo Avis Mandare is certainly not shy and likes all kinds of attention, so grab your bird call whistle and binoculars and make sure you register for the 2022 VCIA Conference before the clock strikes midnight on Friday July 1st when Early Bird migrates away! I suggest you dally no longer and secure your spot at the captive industry’s biggest and best summer conference by booking your attendance via this link. 

The early bird gets the worm, or in #VCIA2022’s case, gets the best registration rates, which end June 30th!

VCIA’s 37th Annual Conference–our first in-person in 2019–promises to be an outstanding week of special events, productive networking, and, I’m not afraid to say it, the best captive education you’ll find on the planet.

The variety and depth of sessions, all incorporating the latest trends, emerging risks, and legal contexts, form the foundation of #VCIA2022. You will discuss captives and collaborate on ideas related to climate change, social inflation, tax developments, InsureTech (to name just a few). Simply put, nothing can match that experience without being on the ground in Burlington, Vermont the week of August 8th. Hundreds of captive professionals tend to agree with my perspective. We have attracted a strong crowd to register for the conference already, and we expect our current 500+ count to surge as the expiration of the discount approaches. 

Make memories at #VCIA2022. Register now to secure your early bird rate!

A major focus of mine as the new VCIA president is value. What value has VCIA brought to its members and stakeholders in the past and how can I improve upon that? I meet with people and companies on a regular basis to hear their needs and understand how VCIA can help. In the same way, #VCIA2022 is all about value. We’ve built into a week’s schedule as much as quality possible so you benefit from the value of the finest captive educational content and networking opportunities.

#VCIA2022 is all about value. We’ve built into a week’s schedule as much quality as possible so you benefit from the value of the finest captive educational content and networking opportunities.

VCIA President Kevin Mead

Don’t just take it from me. Dozens of talented captive professionals have been working hard for months to produce something special. I refer to the Conference Task Force and VCIA’s Director of Education and Programming Diane Leach. The 2022 Chair of the Conference Task Force, Ian Davis, Senior Vice President, Captive Insurance Relationship Manager at People’s United Bank, realizes the anticipation for #VCIA2022 is growing and can’t wait to share the fruits of our team’s labor. “We know how much it means for the industry to get together and you will see that on full display at the conference, guaranteed. We’ve designed the conference to emphasize engagement, to explore important ideas and how they can benefit our companies, and to celebrate how we all are moving the captive world forward.”

I for one am proud as hell for all the blood, sweat, and tears we’ve put into our Annual Conference. I’m also super excited. Together with some of you, this will be my first VCIA Conference, and I am really looking forward to being able to start and build relationships and connections that will mutually benefit the VCIA and the entire industry.

First step? Spot the early bird and register today! See you sooner than you think!

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!

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

Member Mixer

Thank you to all our members who joined us this past Wednesday evening for VCIA’s open board meeting, DFR Q & A, and Mixer. It was so nice to see people gathering once again, even if somewhat cautiously, for VCIA’s first in-person event since the beginning of COVID.

Besides hearing the litany on how many legislative items we are watching down in DC that will likely not move this Congress due to the continued gridlock, members got to hear Dave Provost and Dan Petterson from Vermont’s Department of Financial Regulation provide an update on their work and changes in the future that they will see.  Brittany Nevins , Vermont’s Director of Captive Marketing, screened a new video she produced extolling the virtues as Vermont as a captive domicile for members. It was a terrific piece that will be used in the State’s marketing efforts going forward. One of the “stars” of the video was VCIA new board member, Joe Carter, from United Educators, who did a super job outlining what makes Vermont so special for captive owners.

Dave provided an update on the number of captives being licensed this year and it sounds like its going to be a record breaker. Over 40 have been approved to date and we usually see a wave of applications toward the end of the year as organizations scramble to get their captives licensed. That said, we could easily hit 50 new captives this year. A good year for new captives licensed in Vermont is usually around 25. Another interesting note, DFR is seeing far fewer dissolutions and redomestications out of Vermont then normal, meaning that current captives are not only happy but thriving. Dan reported that DFR was fully staffed and ready to take on the workload that these new captives promise.

The reception was a terrific way to cap off the day with an opportunity to see and say “hi” to many of our old and new friends alike. A special shoutout to former board member, and good friend, Ed Koral who traveled all the way from New York City to joins us that evening. I think the prize for the greatest distance traveled for the event was by Andrew Zoller, the new Head of International & Captive Solutions – US Commercial Insurance for Zurich North America, who flew in from Dallas.  Welcome to the family, Andrew!

Rich Smith,
VCIA President

Stay well and see you soon!

Is Gridlock Good for Captives?

Not surprising news that Capitol Hill continues to be the most dysfunctional place in the United States. Even must-pass bills or bills where there is broad consensus around the priorities, such as the debt ceiling or infrastructure support, are being held hostage by more acrimonious politics than ever before. I spent three years on Capitol Hill and loved my time there. Not that it wasn’t political and sometimes rancorous, but there was a general feeling that we were all there for the greater good.

Enough gloom on the situation – the question remains is this dysfunction in any way good for the captive industry? Since insurance policy is primarily state driven, it might seem not to matter. However, as we have seen in the not too distant past, actions in Washington can have an effect on our industry, usually as collateral damage. The passage of the Nonadmitted and Reinsurance Reform Act (NRRA) is one good example. NRRA was not intended to pertain to captives, but because it was poorly drafted and tacked onto a bill barreling through Congress (Dodd-Frank) it is now interpreted that way.

The positive effect of Congressional dysfunction is that almost nothing will pass in the near term. That’s not to say that there aren’t bills of interest to our industry, such as PRIA (a government-backed pandemic reinsurance program similar to TRIA), updates to the LRRA, or the cannabis bill that creates a safe harbor for financial services to provide products where pot is legal.

My take on it is that Washington gridlock is not good for captive insurance. Risk management is increasingly important, and taking more of a center stage in broader policy discussions at the national level. So it would benefit everyone (captive owners, the industry and the country) if Congress were a place where one could work with both sides of the aisle to move a good piece of legislation forward. Presently, nothing is likely to pass – unless it is tacked on to a bill that finally gets dislodged. And that is not the best way for good policy to take place.

Two bits of news regarding captive people: First, VCIA board member Lawrence Cook has joined Somers Risk Services as director of client services, where he will be responsible for enhancing client relations and services as well as special project work, marketing support, and partner company relations. Prior to joining Somers Risk, Lawrence was the director, program management, for Sedgwick. Congratulations, Lawrence!

Second, Jay Branum resigned from his position as the director of captives in the South Carolina Department of Insurance (SCDOI). Jay joined the SCDOI in late 2013 as captive director, a newly created position, and in his time there South Carolina experienced tremendous captive insurance growth. Even though Vermont and South Carolina are competitors in the captive insurance arena, Jay has always been helpful and willing to share his many years of wisdom with me. He is truly a class act, and VCIA wishes him all the best in his new endeavors.

I look forward to seeing many of you at our Member Mixer next Wednesday, October 20th at the Hilton Burlington Lake Champlain! Register here.

Stay well, and see you soon!
Rich Smith,
VCIA President